Walden University

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Walden Dissertations and Doctoral Studies
Walden Dissertations and Doctoral Studies
Collection

2017

Restaurants Owner Strategies for Financial

Sustainability Beyond 5 Years
Raimi Gnonlonfoun
Walden University

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 Walden University

College of Management and Technology

This is to certify that the doctoral study by

Raimi Gnonlonfoun

has been found to be complete and satisfactory in all respects,

and that any and all revisions required by
the review committee have been made.

Review Committee
Dr. Erica Gamble, Committee Chairperson, Doctor of Business Administration Faculty

Dr. Janet Booker, Committee Member, Doctor of Business Administration Faculty

Dr. Peter Anthony, University Reviewer, Doctor of Business Administration Faculty

Chief Academic Officer

Eric Riedel, Ph.D.

Walden University
2017
 Abstract

Restaurants Owner Strategies for Financial Sustainability Beyond 5 Years

by

Raimi Gnonlonfoun

MS, Finance and Management, Abomey-Calavi University, 2004

MS, Business Management, Abomey-Calavi University, 1997

BS, Economics, Abomey-Calavi University, 1995

Doctoral Study Submitted in Partial Fulfillment

of the Requirements for the Degree of

Doctor of Business Administration

Walden University

December 2017
 Abstract

The restaurant industry plays an essential role in the U.S. economy. Approximately 26%

of small- and medium-sized enterprise restaurants fail during their first year of business

operation and 60% cannot sustain beyond 3 years. The objective of this multiple case

study was to explore the strategies that small- and medium-sized restaurant owners used

to financially sustain business beyond 5 years. The purposive sample consisted of 4

successful restaurant owners who have been in operation for at least 5 years in the

southern region of the United States. The general systems theory was the conceptual

framework of this study. The data were collected from semistructured interviews, cash

flow statement, and profit and loss statements. Member checking and transcript review

were used to strengthen the credibility and trustworthiness. The 3 themes that emerged

from methodological triangulation after completing the Yin’s 5 steps of data analysis

were market research, great customer service, and having passion. The findings of this

study might serve as a guide for current and future SME restaurant owners to financially

sustain business beyond 5 years. The findings of the study may contribute to social

change as successful small- and medium-sized enterprise restaurant owners would help

address unemployment issues by generating additional jobs and building wealth for

themselves, their employees, communities, and the local economy.

Restaurants Owner Strategies for Financial Sustainability Beyond 5 Years

by

Raimi Gnonlonfoun

MS, Finance and Management, Abomey-Calavi University, 2004

MS, Business Management, Abomey-Calavi University, 1997

BS, Economics, Abomey-Calavi University, 1995

Doctoral Study Submitted in Partial Fulfillment

of the Requirements for the Degree of

Doctor of Business Administration

Walden University

December 2017
 Dedication

I dedicate this doctoral study to my mother and father, who early motivated me to

prioritize educational goals. Thank you for all your love and encouragement. I dedicate

this study to my wife, Rachidath, and my son, Rayane, for their sacrifice, patience,

support, and encouragement throughout this journey. I thank my brothers, sisters, and

other relatives who contributed to my success.

 Acknowledgments

I would like to thank God for the strength and resources to accomplish this study.

I am grateful to my committee chair, Dr. Erica Gamble, for her guidance and tremendous

assistance. Dr. Gamble was always available to support when needed. I sincerely thank

my second committee member, Dr. Janet Booker, and the university research reviewer

(URR), Dr. Peter Anthony, for providing useful tips and valuable feedback that helped

me to make progress. My sincere gratitude Dr. Lisa Kangas for her inputs and guidance. I

would like to thank Dr. Freda Turner, Dr. Nina Nabors, Dr. Susan Davis, and other DBA

faculty and staff for their guidance throughout this journey. I am also grateful to my

family and friends for their support. My acknowledgement also goes to Dr. Paulin

Adjagbodjou and Dr. Stella Fayomi-Olaleye for their support that helped me to stay

focused and motivated.

 Table of Contents

List of Tables .......................................................................................................................v

Section 1: Foundation of the Study......................................................................................1

Background of the Problem ...........................................................................................1

Problem Statement .........................................................................................................2

Purpose Statement ..........................................................................................................2

Nature of the Study ........................................................................................................3

Research Question .........................................................................................................5

Interview Questions .......................................................................................................5

Conceptual Framework ..................................................................................................5

Operational Definitions ..................................................................................................6

Assumptions, Limitations, and Delimitations ................................................................8

Assumptions............................................................................................................ 8

Limitations .............................................................................................................. 9

Delimitations ........................................................................................................... 9

Significance of the Study .............................................................................................10

Contribution to Business Practice ......................................................................... 10

Implications for Social Change ............................................................................. 11

A Review of the Professional and Academic Literature ..............................................11

Systems Theory..................................................................................................... 13

Lack of Management and Experience................................................................... 15

Financial Challenges ............................................................................................. 21

i
 Technology Issues ................................................................................................. 26

Learning Organization .......................................................................................... 28

Workforce Incapacity............................................................................................ 33

Lack of Innovation ................................................................................................ 35

Effect of SMEs on Employment and Economics ................................................. 38

Literature Related to Methodology and Design .................................................... 41

Transition and Summary ..............................................................................................43

Section 2: The Project ........................................................................................................45

Purpose Statement ........................................................................................................45

Role of the Researcher .................................................................................................46

Participants ...................................................................................................................47

Research Method and Design ......................................................................................49

Method .................................................................................................................. 49

Design……………………………………………………………………… ....... 51

Population and Sampling .............................................................................................53

Population and Sampling Method ......................................................................... 53

Sample Size Justification ...................................................................................... 54

Data Saturation...................................................................................................... 54

Criteria for Selecting Participants ......................................................................... 55

Interview Setting ................................................................................................... 55

Ethical Research...........................................................................................................56

Data Collection Instruments ........................................................................................57

ii
 Data Collection Technique ..........................................................................................58

Data Organization Techniques .....................................................................................60

Data Analysis ...............................................................................................................61

Reliability and Validity ................................................................................................62

Reliability.............................................................................................................. 63

Validity ................................................................................................................. 63

Transition and Summary ..............................................................................................65

Section 3: Application to Professional Practice and Implications for Change ..................66

Introduction ..................................................................................................................66

Presentation of the Findings.........................................................................................67

Emergent Theme 1: Market Research................................................................... 68

Emergent Theme 2: Great Customer Service ....................................................... 72

Emergent Theme 3: Having Passion ..................................................................... 77

Applications to Professional Practice ..........................................................................80

Implications for Social Change ....................................................................................81

Recommendations for Action ......................................................................................81

Recommendations for Further Study ...........................................................................83

Reflections ...................................................................................................................83

Summary and Study Conclusions ................................................................................84

References ..........................................................................................................................86

Appendix A: Informed Consent Form .............................................................................118

Appendix B: Letter of Introduction .................................................................................121

iii
Appendix C: Interview Questions ....................................................................................123

Appendix D: Interview Guide and Data Collection .........................................................124

Appendix E: Interview Protocol Research Checklist.......................................................126

iv
 List of Tables

Table 1. Strategies Participants Used for Sustainability……………………………...…69

Table 2. Strategies for Sustaining Restaurant Business Beyond 5 Years……………..…74

Table 3. Participants’ Final Advice on Sustainability………………………………...…78

v
 1
Section 1: Foundation of the Study

Restaurant owners face many difficulties to sustain their businesses. The purpose

of this study was to gain the viewpoints of successful restaurant owners to understand

strategies to financially sustain business in the restaurant industry. Successful restaurant

owners were eligible to provide useful information for current and potential restaurant

owners about how to financially sustain business beyond 5 years. The findings of this

study can benefit restaurant owners operating in the southern region of the United States.

The implementation of optimal strategies for financial sustainability might contribute to

business prosperity with profit maximization. This qualitative study was about exploring

strategies that owners in the restaurant industry used to financially sustain business

beyond 5 years.

Background of the Problem

The restaurant industry plays a significant role in the U.S. economy (Herrington

& Bosworth, 2016). The U.S. restaurant industry sales account for 4% of the U.S. gross

domestic product (GDP) and the revenue projection of the industry can reach $783 billion

in 2016 (National Restaurant Association [NRA], 2016). Today, business owners in the

restaurant industry employ 14.4 million employees, representing 10% of the U.S.

workforce and this number will grow to 16.1 million employees by 2026 (NRA, 2016).

Despite the contributions of restaurant industry in U.S. economy, restaurant owners

experience difficulties to sustain their businesses (Hua & Lee, 2014).

Business owners face multiple challenges, such as the lack of financial

management associated with the incapacity to scan the business environment, which
 2
weakens the success of small- and medium-sized enterprises (SMEs) and constrains them

to failure (Karadag, 2015). Self, Jones, and Botieff (2015) highlighted that the restaurant

business is a risky business for inexperienced and uninformed business owners.

Restaurant owners are subject to the fluctuation of the U.S. economy, because the

restaurant owners lack financial management skills and have no business plan (Parsa van

der Rest, Smith, Parsa, & Bujisic, 2015). In the restaurant industry, approximately 26%

of SMEs fail during their first year of business operation and 60% cannot sustain beyond

3 years (Mun & Jang, 2015). The high incidence of SME failure is a waste of resources

and human costs (Fatoki, 2014). Owners of SMEs may reduce the consequences of

business failure by implementing successful financial strategies.

Problem Statement

SME owners in the restaurant industry frequently face difficulty in achieving

financial performance, which accelerates their failure (Hua & Lee, 2014). Twenty six

percent of U.S. SME restaurants fail within the first year of operation, and 60% fail

within 3 years due to limited financial strategies (Mun & Jang, 2015). The general

business problem is that some restaurant owners are unsuccessful. The specific business

problem is that some SME restaurant owners lack strategies to financially sustain their

businesses beyond 5 years.

Purpose Statement

The purpose of this qualitative multiple case study was to explore the strategies

that SME restaurant owners used to financially sustain their businesses beyond 5 years.

The target population consisted of four SME restaurant owners located in the southern
 3
region of the United States who have implemented strategies that enabled them to

financially sustain their business operations for more than 5 years. The implication for

positive social change includes potential restaurant management decisions that would

help restaurant owners to enhance their profitability with new job creation and reduce the

rate of SME failure. The findings of this study might contribute to positive social changes

by enabling business practices information for SME owners that might increase the

success rate of SME owners and, in turn, reduce the unemployment rate and increase

revenue.

Nature of the Study

I used a qualitative research methodology for this study. The qualitative

methodology is a research approach that enables researchers to explore phenomena

through the perspectives of the target population who experience them (Vaismoradi,

Turunen, & Bondas, 2013). I used a qualitative study to explore the experiences and

perceptions of business owners about the strategies that SME owners needed to

financially sustain their businesses beyond 5 years in the United States. A qualitative

study was appropriate for this research because SME owners provided their opinion and

perception on business strategies to succeed. Quantitative inquiry was not suitable for this

study because researchers use closed questions and statistical measures to test hypotheses

(Doody & Noonan 2013; Morse, 2015). Mixed- methods research was not appropriate for

this study because the approach is the combination of qualitative and quantitative method

which requires more resources and time that may influence the research process

(Harrison, 2013). The qualitative method was the most appropriate research method due
 4
to the nature of the research strategy and the need to understand the meanings of SME

restaurant owners about the strategies for achieving business profitability (Massey,

Chaboyer, & Aitken, 2014).

I used a multiple case study design in this study. A case study design is a

technique of qualitative inquiry in which researchers explore various viewpoints

regarding a specific phenomenon (Yin, 2014). Qualitative research designs include

narrative, ethnography, grounded theory, case study, and phenomenology (Tong,

Chapman, Israni, Gordon, & Craig, 2013; Turner, Balmer, & Coverdale, 2013).

Qualitative researchers consider narrative design to explore the lifelong stories of an

individual or a small group of participants to capture the essence of phenomena (Gill,

2014). Therefore, a narrative design was not appropriate for this study.

Researchers use ethnography design to describe and interpret the actions and

behaviors of cultures or social groups (Tong et al., 2013). An ethnography design did not

fit this study because the exploration of social groups was not the focus of this study.

Investigators that use a phenomenological design focus solely on collected data through

one-to-one interviews to explain the lived experience of participants (Raco & Tanod,

2014), whereas researchers with case study design apply multiple sources of data

collection to clarify the causal relationships between participants and describe the

phenomena (Cronin, 2014). I selected a multiple case study design to explore the

experiences of SME restaurant owners regarding the strategies to financially improve

their business operations. Therefore, a multiple case study design was the most

appropriate for this study.

 5
Research Question

What strategies do SME restaurant owners use to financially sustain their

businesses beyond 5 years?

Interview Questions

The study included semistructured interviews with open-ended interview

questions to address the primary research question. This study included the following

interview questions:

1. What strategies have you used to financially achieve business sustainability?

2. What strategies have you found appropriate to sustain your business?

3. How did you implement your strategies to run a profitable business?

4. What factors have contributed to the growth of your business?

5. What barriers did you have during the first years of your business operations?

6. What strategies did you implement to mitigate these barriers?

7. What additional information would like to share on financial strategies for

achieving business sustainability?

Conceptual Framework

The theory used in this research study was the general systems theory. von

Bertalanffy (1972) was the first to coin the concept of general systems theory in the

1930s. von Bertalanffy highlighted the importance of interrelations between components

within a system as interdependency and suggested that the outcomes of the system or an

organization derive from the interrelationship of its components. The primary idea of

systems is wholeness (von Bertalanffy, 1972). Valentinov (2014) posited that systems
 6
interact with external factors while being in continuous evolution with their components.

Systems theory construct serves as a foundation to explain phenomena and trends of real

world systems (Whitney, Bradley, Baugh, & Chesterman Jr., 2015). Systems theory fit

this study because restaurant owners must consider multiple resources and develop

strategies to financially sustain business. Through the systems theory, I was able to

comprehend the strategies successful restaurant owners use to achieve profitable

business. This study can help restaurant owners to develop strategies to financially

sustain business beyond 5 years.

Operational Definitions

Defining technical terms that appear throughout this research on SMEs may help

to clarify the readers’ understanding. The definitions may reflect the general meaning, but

their selection is consistent with the context of this study. This subsection includes the

following definitions: business failure, entrepreneurship, financial distress, learning

organization, profitability, and small- and medium-sized enterprise.

Business failure. Minello, Alves Scherer, and da Costa Alves (2014) define

business failure as business discontinuity. Business failure occurs when an enterprise’s

income decreases and expenses increase, which lead to the enterprise’s insolvency and

restrict the possibilities of attracting debt financing or net equity (Minello et al., 2014).

Entrepreneurship. Entrepreneurship is the process that enables entrepreneurs to

discover, evaluate, and exploit opportunities (Sahut & Peris-Ortiz, 2014).

Entrepreneurship involves entrepreneurs’ personality traits and psychological features

 7
that are useful to explain the capability of entrepreneurs to discover opportunities and

exploit them effectively (Sahut & Peris-Ortiz, 2014).

Financial distress. Financial distress manifests in two ways: stock-based

insolvency and a flow-based insolvency (Lin, Ansell, & Andreeva, 2012). A stock-based

insolvency occurs when an enterprise’s total liabilities exceed the total assets. A flow-

based insolvency takes place when the cash flow is unable to satisfy routine obligations

(Lin et al., 2012).

Learning organization. Learning organization is the ability of a firm’s human

resource to learn that helps business owners to grow their activities steadily (Shirokova,

Vega, & Sokolova, 2013). Business owners can develop strategies to manage resources,

exploit opportunities, and make improvement through learning organization (Shirokova

et al., 2013).

Profitability. Profitability is a measure of business efficiency or effectiveness to

reveal the capability of business operators to generate earnings (Rehman, Khan, &

Khokhar, 2014). Profitability analysis involves the combined effects of liquidity, asset

management, and liability on the efficiency of the enterprise (Rehman et al., 2014).

Small- and medium-sized enterprise (SME). There is no universal definition of

SMEs (Gupta, Wilson, Gregoriou, & Healy, 2014). SMEs are businesses having fewer

than 500 workforces in the United States, although this number of employees ranges from

100 in other countries such as the Netherlands (Sloan, Klingenberg, & Rider, 2013).
 8
Assumptions, Limitations, and Delimitations

The complete understanding of the implications of this study requires the

identification of assumptions, limitations, and delimitations. Each subsection contains the

definitions of assumptions, limitations, and delimitations respectively. The following

sections include the assumptions, limitations, and delimitations in this study.

Assumptions

Assumptions are factors or conditions that researchers assume are evident truths

and remain the sine qua non of the study (Leedy & Ormrod, 2011). My first assumption

was that the data from the interviews would be accurate and the business owners would

have sufficient knowledge of business success. My second assumption was that

participants would respond to interview questions without reluctance, and the degree of

honesty of participants’ responses would determine the reliability of data that would

result from collecting data. My third assumption was that participants would provide the

needed information to understand the strategies to achieve business sustainability in the

southern region of the United States.

Unprofitable enterprises may lead to business failure, whereas profitable

enterprises are likely to sustain their business activities for a long period. In addition,

eligible participants would represent the general population in the southern region of the

United States. Participants would provide their perceptions, perspectives, and input

exclusively during the period of the research study.

 9
Limitations

Limitations are external factors that researchers cannot control, and these factors

restrict a study’s scope or may influence the results of a study (Bloomberg & Volpe,

2012). This study had a few limitations. The data depend on the research methodology,

the selected sample, and the technique of data analysis used. In the qualitative research

method, interviews may lead to a transferability of the research results. Owners may be

reluctant to reveal their own weaknesses, which might affect the data related to internal

factors of SME failure or success. The size of the sample was a limitation, because the

southern region of the United States was the only location for this study. These

considerations may also affect the transferability of the research outcomes. In addition,

the data that results from the research would represent subjective interpretations of

owners due to personal entrepreneurial story explorations characteristics.

Delimitations

According to Bloomberg and Volpe (2012), delimitations are conditions or

considerations that researchers purposefully impose in an attempt to reduce the scope of a

study. Considering prior research restrictions and literature related to SMEs sustainability

or success enabled the craft of the research questions. The decision to conduct research

with these questions was to gain insights into successful factors of SMEs and make

suggestions on business sustainability, and in turn to reduce the business failure rate.

Other external factors that surfaced during the research procedure did not receive

consideration. For these reasons, the scope of data collection and the analysis cannot be

wide ranging. This research was also geographically bound to the United States, but the
 10
literature review and framework are global. I limited the sample and the study outcomes

to the United States, because they may not be transferable to the rest of the world

(Keener, 2013).

Significance of the Study

The significance of this study exists in term of its contribution to business

practices and implications for social change. The findings of this study may lead to

increased business management capabilities among SMEs owners. In addition, the

findings of this study may contribute to positive social change by increasing economic

growth.

Contribution to Business Practice

The findings of this study may lead to improved business practices in exploring

the successful factors that contribute to business sustainability through the personal

experience of SME restaurant owners in the southern region of the United States.

Despite previous research on SMEs, the failure rate remains high. In this study, the

consideration of sustainable business with a focus on business strategies is essential

because enterprises still fail, despite having access to financial resources. The outcomes

from this study may lead to refocused thinking of SME owners on business sustainability.

Changing business practices to improve financial and operational performances can make

SMEs profitable and enable competitive advantages. In addition, the research may be

helpful for promoting small business growth and reducing the rate of SME failure

(Lukason & Hoffman, 2014).

 11
Implications for Social Change

The objective of this study was to explore what strategies that SME restaurant

owners used to financially sustain business beyond 5 years. The findings of this study

may contribute to positive social change by providing information on business

sustainability that could help SME restaurant owners to avoid business failure. SME

restaurant owners may use the results of this study to make informed business decisions

to increase their survival rate and in turn increase revenue and job creation. In addition,

the findings in this study may induce innovative actions and improve the customers’

expectations, because SMEs could ensure high quality of products and services. The

change of SME restaurant owners’ vision toward business sustainability is critical for

promoting profitable SMEs, which may contribute to economic prosperity and minimize

social and environment issues (Sloan et al., 2013).

A Review of the Professional and Academic Literature

The focus of this qualitative case study was the experiences, perceptions, and

understandings of business owners regarding the strategies to financially achieve business

sustainability. This study involved exploring the lived reality of SME restaurant owners

who survived at least 5 years on factors regarding the success of their businesses when

other businesses failed. The systems theory served as a framework through which to

investigate common themes among the participants. The literature review includes

journal articles, dissertations, and website articles related to SME sustainability. The

database searched included ABI/INFORMS Complete, Business and Source

 12
Complete/Premier, Emerald Management Journals, ProQuest, ProQuest Dissertations and

Theses, and Google Scholar.

I limited the search to scholarly, peer-reviewed journals published within the past

5 years. This study included a total of 219 relevant articles. The extensive review of

articles includes 200 peer-reviewed articles published from 2012 to 2017, and 11 from

2011 or earlier. The review comprises eight books or other references. The percentage of

peer-reviewed articles published within 5 years of my anticipated graduation is 91%. The

percentage for a total number of peer-reviewed articles in this study is 211 of 219, or

96% of the literature review. The keywords that I used in searching the databases were as

follows: small- and medium-sized enterprises, success or failure of small- and medium-

sized enterprises, entrepreneurial failure, and SME failure factors. The review of the

literature includes the reasons that SME owners are able to sustain business in the early

stage of operation. The organization of the literature review includes details on (a)

systems theory, (b) lack of management (c) financial challenges, (d) technology issues,

(e) learning organizations, (f) workforce incapacity, (e) lack of innovation, (f) the effect

of SME failure on employment and economics, and (g) literature related to methodology

and design.

The survival of SMEs is central to improving economic prosperity and SME

owners cannot sustain their SME performance due to the multiple challenges they face

(Ates, Garengo, Cocca, & Bititci, 2013). The survival of SMEs is difficult while many

new enterprises start up each year (Nnamseh & Akpan, 2015). More than 66% of SME

failure occurs within the first 2 years of operation, 49.6% failure occurs within 4 years,
 13
and approximately 39.5% of SMEs lead to failure within the first 6 years (Nnamseh &

Akpan, 2015). In the restaurant industry around 30% of SMEs fail during their first

operation year (Hua & Lee, 2014). The performance of SMEs depends on external and

internal factors (Steinerowska-Streb, 2012). To maximize enterprise performance, SME

owners need to develop appropriate business strategies that integrate market forces

(Steinerowska-Streb, 2012). Business owners may revise their practices to achieve

competitive advantages. For example, the owners of small firms can use networks to fill

resource gaps such as funding capabilities, human resources support, or market

knowledge (Williams, 2014).

Systems Theory

The term general systems theory derived from the German von Bertalanffy (1972)

who suggested that different parts of a system hold a continuous interaction among

themselves and the environment. von Bertalanffy (1950) recognized the importance of

interactions between parts in producing organized complexity. The early development of

systems theory came from different branches of sciences in an attempt to explain systems

as an interaction of their components with the possibility to assess system components

and their interactions as a whole (von Bertalanffy, 1950). The systems theory is a unified

collection of suggestions that enable a comprehensive view of systems (Adams, Hester,

Bradley, & Keating, 2014). General systems theory is applicable in multiple disciplines

(von Bertalanffy, 1972). The creation of the Society for General Systems Research

(SGSR) facilitated the development and harmonization of the systems theory (von

Bertalanffy, 1972; Rousseau, 2015). The SGSR is an affiliate of the American Associate
 14
for the Advancement Science (von Bertalanffy, 1972). Following the work of scholar

groups, systems thinking evolved as a set of concepts that can help in solving real-world

issues (Mingers, 2015; Rajagopalan & Midgley, 2015).

System thinking is useful in any field and offers both hard and soft practical

methodologies to assess phenomena (Mingers, 2015). Hard practical methodologies

involve a variety of mathematical instruments and system dynamics that help to solve

complex dynamic systems (Mingers, 2015). Soft practical methodologies include flexible

systems reasoning and cognitive mapping, which derive from the general construct of

problem structuring methods (Mingers, 2015). Scholars termed systems theory as system

thinking because the system thinking is a framework of thought that assists in tackling

complex things (Whitehead, Scherer, & Smith, 2015). Yurtseven and Buchanan (2016)

confirmed that the primary aim of a new model in general systems theory is to prescribe

the laws behind the systems complex and clarify how the systems interact with the

natural world and the evolving components.

Most of the small business owners lack adequate management skills, which leads

their businesses to unsuccessful performances (Sun, Hyland, & Cui, 2014). The

complexity of the business world today requires business owners to have the capability of

systems thinking (Sun et al., 2014). Cowan and Wright (2016) pointed out that business

owners cannot make decisions without assessing the consequences of the decisions. Each

decision should occur among the consideration of daily and longer-term business

decisions (Cowan & Wright, 2016). Systems thinking concept has advanced the models
 15
of reality due to its necessity of decision support and better orientation (Wiek & Iwaniec,

2014).

Lack of Management and Experience

Lack of human skills and knowledge prevent business owners from being

competitive (Al-Hyari, 2013). Poor capital budgeting, excessive inventory, lack of

strategic planning, provisions issues, and inability to seize opportunities are factors of

small businesses (Maruso, Laurence, & Weinzimmer, 2015). Small business failure in

developing and developed countries is the result of exogenous and endogenous factors in

their environment and interplay of relevant experience, location, and the quality of

education (Banwo, Du, & Onokala, 2015). Lack of education and lack of business

experience are common factors of micro, small-, and medium-sized enterprises (MSMEs;

Banwo et al., 2015).

More than 90% of business failures occur due to internal factors, namely poor

skills and lack of experience (Miles, 2014). Business owners who develop profitable

activities have adequate competencies to run a business at a steady rate for a relatively

long period (Blackburn, Hart, & Wainwright, 2013). According to Arasti, Zandi, and

Talebi (2012), business failure can result from management issues, lack of sufficient

marketing skills, or not having financial and qualified human resources (Arasti et al.,

2012). Daou, Karuranga, and Su (2013) support the view that human capital is at the

heart of sustainable competitive advantages.

The results of a qualitative study on entrepreneurial failure revealed specific

causes related to the failure of start-ups, whereas other causes have a connection with
 16
older companies (Hamrouni & Akkari, 2012). Lack of experience, lack of financial

resources, and poor management skills are the main sources of failure in young

companies (Hamrouni & Akkari, 2012). Apergis and Fafaliou (2014) contended that

entrepreneurial education is critical in many respects because entrepreneurial skills play a

key role in enabling awareness about entrepreneurship as a potential career path and

developing skills for establishing and achieving enterprise growth. Ramayah, Ahmad,

and Char Fei (2012) also noted that entrepreneurship education has an effect on

entrepreneurs’ intention and entrepreneurs’ careers. The entrepreneurs who succeed are

those who perform a wide variety of entrepreneurial skills, especially while launching a

business (Apergis & Fafaliou, 2014). The main causes of businesses that fail after more

than 6 years of business operation are the absence of follow-up in business development,

a lack of proper financial management, and the abuse of personal expenses (Hamrouni &

Akkari, 2012). Small businesses cannot survive without generating a profit from their

daily activities, and the lack of management skills remains the primary reason of small

business failure (Lin et al., 2012).

The SMEs whose staff achieved higher sales progress exhibited an entrepreneurial

orientation and developed effective knowledge management systems (Chaston, 2012). A

quantitative study that involved examining and classifying barriers to entrepreneurship

development among SMEs revealed several important barriers (Jafarnejad, Abbaszadeh,

Ebrahimi, & Abtahi, 2013). A lack of knowledge in managerial capabilities and business

management; a lack of appropriate investment to start and sustain a business; difficulty

finding information regarding markets, products, and prices; challenges obtaining bank
 17
loans; and difficulty hiring talented and reliable staff were the most significant barriers

and challenges to entrepreneurship development (Jafarnejad et al., 2013). The outcomes

of a qualitative case study on the strategic decision-making process in SMEs showed that

the quality of each activity in the strategic decision-making process depended profoundly

on an enterprise’s resources and the skills of owners and managers, which are the

structural characteristics of SMEs (Xueli & Wang, 2012). The techniques used to gather

and process the information for decision-making were dependent upon the experiences

and educational qualifications of owners and managers (Xueli & Wang, 2012).

A study on the knowledge acquisition strategies in SMEs during institutional

transition revealed that both managerial knowledge and marketing knowledge have a

critical influence on SME success, but priorities may vary depending on the stage of

SME development (Danis & Shipilov, 2012). Managerial skill was the most difficult to

acquire, whereas technical knowledge seemed the easiest (Danis & Shipilov, 2012). The

managerial procedures of a hired, professional manager can assist SME owners in

reducing the negative influence of an economic downturn on firm profitability

(Steinerowska-Streb, 2012). A business can experience greater losses under the owner

management during reduced economic activity (Steinerowska-Streb, 2012).

Well-developed managerial practices are significant for SME operators to

enhance business performance and achieve a competitive edge (Ates et al., 2013). SME

operators can have difficulties developing and adopting alternative managerial practices

(Ates et al., 2013). Considering the characteristic dynamics of SMEs is imperative to

stimulate the improvement of managerial capability (Ates et al., 2013).

 18
Managers use strategic marketing to build and achieve a sustainable competitive

edge (Morgan, 2012). A marketing strategy requires the ability to assess external factors

such as competitors’ force and customers’ needs (Morgan, 2012). Business experience

with market knowledge that includes products or services is a source of marketing

strength (Cronin-Gilmore, 2012). In addition, excellent customer service and a friendly

staff support marketing success (Cronin-Gilmore, 2012).

By considering strategy, indicators, human resources, and technology, Chalmeta,

Palomero, and Matilla (2012) developed a method to enable the implementation of a

performance measurement system to 22 collaborating SMEs. Implementing a

performance measurement system necessitated an organizational culture and the capacity

within a firm to process and to interpret information (Chalmeta et al., 2012). The staff

within SMEs must have performance evaluation training prior to the implementation of a

performance measurement system and be able to work with recorded data rather than just

execute their daily business activities (Chalmeta et al., 2012).

Research based on data from secondary sources served as the foundation for

Cano-Olivos, Orue-Carrasco, Martínez-Flores, and Mayett (2014) to propose a logistics

management model for supply chain implementation within SMEs in the textile sector.

The model included the four primary areas of SMEs in textile manufacturing: inventories,

storage, production, and distribution. For inventories, the model involves determining the

amount of material needed and the timing. Retaining storage for operative standards

serves to protect and control raw materials efficiently. Production should be consistent

with a master program to satisfy customers’ demands and wants, especially with regard to
 19
time, quantity, and quality. SME owners must also achieve supply chain value by

optimizing the level of finished product inventory, transportation, and delivery to

improve distribution efficiency (Cano-Olivos et al., 2014). The effectiveness of the

current model necessitates an approach based on a hybrid push-pull model in the supply

chain because the push-pull system must satisfy customers regarding time, quality, place,

quantity, and service at a reduced cost (Cano-Olivos et al., 2014).

The majority of SME owners do not have logical risk management strategies in

place; SME owners used standard hazard identification forms (Islam & Tedford, 2012).

Many SME owners have not implemented assessment norms to evaluate the

consequences or lack enough information to determine root causes (Islam & Tedford,

2012). Furthermore, the identification of risk determinants varies from one organization

to another based on the likelihood of their occurrence and their influence on business

performance (Islam & Tedford, 2012). Gao, Sung, and Zhang (2013) found that the

capabilities for building risk management initiatives were not applicable in SME sector

due to lack of expertise and know-how of SME owners. A knowledge sharing scheme

between partners was an ideal driver for achieving risk management building initiatives

(Gao et al., 2013). The multiple-strategy approach supported SME owners understanding

how the effects of turbulence could be useful for creating growth in markets while

reducing the potential for risk (Bamiatzi & Kirchmaier, 2014).

The results of a study on the operational risk of industrial SMEs showed a

connection between risk, a firm’s dynamics, and its constant interaction with the

environment (Restrepo, Diaz, & Ocampo, 2014). Operational risk evaluation is useful for
 20
identifying a company’s inability to generate cash flow and cover fixed costs and

operational expenses (Restrepo et al., 2014). Quantifying major financial indices can lead

to early warnings related to financial risks associated with the likelihood of not covering

fixed costs derived from the indebtedness structure or a company’s lack of operational

resources when they are lower than the industry average (Restrepo et al., 2014). The

major financial indices according to Restrepo et al. (2014) include profitability, liquidity,

indebtedness, efficiency, and viability.

Pal, Westerlind, and Torstensson (2013) found that during financial crises, SME

owners focus on proactive rather than reactive strategies and tend to neglect recovery

plans to manage the crisis. Proactive strategies even from team members can be

ineffective for SMEs, due to resource constraint, which requires an alternative option to

develop the crisis strategic planning process (Pal et al., 2013). The combination of

proactive and reactive strategies might be useful for achieving crisis resilience (Pal et al.,

2013).

Many SME owners apply a two-stage strategic decision-making process rather

than a problem–analysis–solution progression (Xueli & Wang, 2012). Strategic decision-

making weaknesses are the consequences of SME owners or managers’ incapacity to

develop broad and potential decision options (Xueli & Wang, 2012). Many information

searches and processes are of moderate quality (Xueli & Wang, 2012). Owners of SMEs

can use strategic alliances to distinguish their competitive capabilities in proprietary

technologies and talented human resources (Mitchell & Canel, 2013). Strategic alliances

are important strategies and tools for achieving competitive advantages in SMEs because
 21
SME owners can focus their resources on their specific competencies and access missing

resources through collaborating with partners (Mitchell & Canel, 2013). Furthermore, the

primary objective of a strategic alliance is to gain more benefits rather than operate with

individual capabilities (Mitchell & Canel, 2013).

In a study on efficiency and flexibility in small businesses, Chuanyin (2012)

found that enterprise owners can achieve efficiency through multiple strategies, including

product development or the process consideration of enterprise operation, and enterprise

owners can also apply flexibility to mitigate the effect of uncertainty and change.

Efficiency and flexibility are two basic strategies small enterprise owners can use

(Chuanyin, 2012). Enterprises with industry characteristics can compete effectively

(Chuanyin, 2012). Small enterprises lack resources, and implementing strategic

alignment is useful for safeguarding them against business instabilities (Chuanyin, 2012).

Value creation is a fundamental source of competitive advantage, and small enterprise

owners who can create value have many opportunities to survive and grow in competitive

markets (Chuanyin, 2012).

Financial Challenges

Bankruptcy can result from a single or multiple causes due to managerial mistakes

(Lukason, 2014). External credit accessibility is a critical issue for SME owners (Dong &

Men, 2014). Don and Men contend that a more concentrated banking sector causes

difficulties for SME funding. Government regulations, financial system, and economies

characteristics influence the accessibility of SME owners to external funding (Beck,

2014).
 22
The capital acquisition is the most difficult aspects of starting, operating, and

growing a small business (Van Auken, 2015). The deficiency of capital may lead to cash

flow shortages, inability to seize market opportunities, and business failure (Van Auken,

2015). Cash flow management is significant for small business owners to perform

strategies towards increasing profitability, forecasting, and sustainability (Mungal &

Garbharran, 2014). Economic conditions, type of business, current financial characteristic

and small business owners’ preferences are factors that influence capital acquisition (Van

Auken, 2015). For Ramiah, Zhao, and Moosa (2014), business owners can use cash flow

management to boost liquidity, control cash flows, and optimize the value of funding

while reducing their cost. Enterprise operators should optimize the capital structure to

maximize enterprise value by reducing capital costs.

Firm’s profitability, liquidity, and solvency are simple ratios to predict financial

distress (Brédart, 2014). Business owners can check their capability to pay debt and to

continue operating through financial ratios (Brédart, 2014). Profitability is the most

critical issue of business failure because the likelihood of business owners to face

financial distress is high when profits decrease for a long run (Brédart, 2014). A default is

imminent with a low solvency of the firm (Brédart, 2014).

Flexible regulations are necessary for business success (M. Wright & Stigliani,

2013). For example, the facility to get abundant financial resources from banking system

and the establishment of newly nonfinancial institutions to invest in uncertain businesses

can succeed if entrepreneurs have skills to develop appropriate knowledgeable capability

for their respective business activities (M. Wright & Stigliani, 2013). Islam and Tedford
 23
(2012) noted that SME owners rely on sales or profit as financial determinants to estimate

business risks.

The results of a quantitative study on the influence of enterprise and industry

characteristics on the capital structure in Dutch small firms showed enterprise owners

used profits to reduce their debt level, and growing companies increased their debt

situation because the SMEs needed more funds (Degryse, de Goeij, & Kappert, 2012).

Inter- and intraindustry effects are significant factors of small firms’ capital structure

(Degryse et al., 2012). Industries have different average debt levels, which reflect the

trade-off theory, whereas decisions regarding capital structure are consistent with the

pecking-order theory (Degryse et al., 2012). Degryse et al. (2012) concluded that the

degree of competition, the degree of agency conflict, and heterogeneity in employed

technology are also significant drivers of capital structure. Britzelmaier, Kraus, Michael,

Mayer, and Beck (2013) explained the influence of cost of capital on value based

management. Value-based management may have useful management concepts for SME

owners; estimating the cost of capital is a critical element of value-based management

concepts (Britzelmaier et al., 2013). The cost of equity in SMEs must derive from

alternative procedures due to the absence of capital market data (Britzelmaier et al.,

2013).

Government regulations exist to ease the access of SME owners to external

financing due to the crucial role of SMEs in achieving national development of countries

(Abdulsaleh & Worthington, 2013). Agents of financial institutions are reluctant to lend

to SMEs because the dominant position of SME owners which leads to maximizing the
 24
information asymmetry problem (Abdulsaleh & Worthington, 2013). Bankers use

transaction lending and relationship lending as specific lending techniques to expanding

SMEs access to external funding (Beck, 2013). Bank officers apply transaction

techniques through factoring that requires hard quantitative information to evaluate the

opacity of SMEs (Abdulsaleh & Worthington, 2013). A relationship lending requires soft

information lenders gather from SME owners to assess credit risks (Abdulsaleh &

Worthington, 2013).

Firms’ characteristics are important factors for accessing financial resources

(Yildirim, Akci, & Eksi, 2013). For example, SME owners at start-up stage experience

difficulties financial deficiencies and such challenges are critical during an economic

downturn (Dzisi & Ofosu, 2014; Yildirim et al., 2013). In the context of Italy, there is a

close link between the capital structure of SMEs and their likelihood of default (Modina

& Pietrovito, 2014). A high level of bank debt and the high incidence of interest expenses

are major factors that anticipate insolvency (Modina & Pietrovito, 2014). As a result,

bankers should consider financial structure variables, namely the combination of sources

of funding and the cost of debt regarding defaulting prediction models appropriate for

SMEs (Modina & Pietrovito, 2014).

In a research study on the quantity and quality of information and the financial

structure of SMEs, Van Caneghen and Van Campenhout (2012) confirmed that the

amount or quality of financial statement data affected the financial structure of SMEs.

The findings revealed that both the amount and the quality of financial statement

information have a positive link with SME leverage, which in turn has an active
 25
connection with asset structure, growth and medium industry leverage and a negative

influence on enterprise age and profitability (Van Caneghen & Van Campenhout, 2012).

Enterprise owners who effectively manage their short-term assets and liabilities have a

higher propensity to achieve competitive advantages (Salazar, Soto, & Mosqueda, 2012).

In a study on the determinants of enterprise growth in Bosnia-Herzegovina,

Delalić and Oruč (2014) found that the main factors affecting the success of rural

enterprises in Bosnia and Herzegovina had connections with financial institutional and

infrastructural constraints. Each factor seemed to have a similar level of influence on

rural success (Delalić & Oruč, 2014). Hence, the need exists to consider all factors

concurrently to achieve effectiveness in rural enterprises (Delalić & Oruč, 2014). A link

existed between institutional factors and the business climate, both factors strongly

affected the growth of rural businesses more than any other factors, and rural

entrepreneurs expected more assistance from local than state-level government (Delalić

& Oruč, 2014). In addition, Delalić and Oruč noted rural businesses required a source of

finances to buy new machines and facilities, to renovate old ones, and to invest in new

skills. The easy access to start-up financial resources had a positive influence on

enhancing entrepreneurial activities in rural regions (Delalić & Oruč, 2014).

Barth, Lin, and Yost (2011) studied SME financing in transition economics and

revealed that a more developed banking sector contributes positively to SME owners’

ability to access both short-term and long-term loans. Banks from more developed

banking systems provide loans with longer average durations and lower annual rates

(Barth et al., 2011). Higher foreign bank ownership hinders SME owners’ access to bank
 26
loans (Barth et al., 2011). In addition, banks from countries with higher foreign bank

ownership take a longer time to approve SME loans, require a higher collateral value, and

charge higher interest rates (Barth et al., 2011).

Technology Issues

Based on a research model that included competitive intensity, market or demand

turbulence, and technological turbulence, Uzkurt, Kumar, Kimzan, and Sert (2012)

conducted an empirical study on SMEs to investigate the influence of environmental

uncertainty dimensions on organizational innovativeness. According to the findings,

market or demand turbulence and technological turbulence have a positive influence on

the innovativeness of SMEs (Uzkurt et al., 2012). The competitive intensity did not have

a significant effect on an SME’s innovativeness (Uzkurt et al., 2012). A high level of

technological turbulence in the environment tends to force enterprise owners to assess

continually and adopt new solutions for their businesses (Uzkurt et al., 2012). Having

uncertain and turbulent conditions is the best time for capitalizing and leveraging the

positive imperative and increased tendency for organizational innovativeness (Uzkurt et

al., 2012). Although Van Es and Van Der Wal (2012) confirmed the findings by Uzkurt

et al. by stating owners of enterprises based on technology can change their approach to

the market faster and better than the owners of enterprises based solely on products.

Enterprises that have a focus on research and development as the primary factors

of information can innovate whereas the research and development are the second

significant source of information for other affiliated businesses (Gomes, Kruglianskas, &

Scherer, 2012). Owners of such businesses use other sources of technical information in
 27
decreasing order: other departments of the firm, suppliers, trade companies, and

expositions and universities (Gomes et al., 2012). The owners practically ignore

community networks and leading users (Gomes et al., 2012). In contrast, after conducting

a multiple case study to explore how owners of Ukrainian and Hungarian SMEs acquire

managerial knowledge, Danis and Shipilov (2012) found that enterprise owners relied

heavily on networks for knowledge acquisition. A high level of dependence on external

interaction supports small business owners for gaining new knowledge, technological

competency, innovativeness, and competitiveness (Huggins & Weir, 2012; Samuel,

Goury, Gunasekaran, & Spalanzani, 2011). Gomes et al.’s (2012) findings also had no

significant differences in the performance indicators when comparing the large and small

enterprises regarding innovation performance. Gomes et al. concluded that associations

existed between several indicators of the management of technological information

sources and the indicators of innovation performance.

An examination of the effect of competitive intelligence and information adoption

on SME performance showed a meaningful scope for improvements on all components of

the diagnostic framework: attitude, gathering, technology support, location, information

technology (IT) systems support, and using intelligence-based output by business

decision makers (S. Wright, Bisson, & Duffy, 2013). A change in attitude leads to better

gathering, and better gathering leads to a known location and better coordination (S.

Wright et al., 2013). Better coordination informs the specification and needs from

technology assistance, which in turn enables the deployment of the most appropriate IT

systems in pursuit of excellence in competitive intelligence (S. Wright et al., 2013). S.

 28
Wright et al. affirmed that all three considerations lead to a better and more suitable use

of derived information by enterprise owners in their decision-making process. Well-

developed IT systems also help to identify knowledge gaps, which in turn drive

intelligence needs analysis and prevent enterprise owners from using analytical tools

inaccurately (S. Wright et al., 2013).

A case study conducted by Solaymani, Sohaili, and Yazdinejad (2012) to examine

the significant factors that influence the tendency of SME owners to apply electronic

commerce in the Kermanshah province of Iran had useful results. The study involved

nonlinear logit and probit models with a sample of 35 SMEs in the Iranian province

(Solaymani et al., 2012). The finding was that SME owners’ tendency to adopt electronic

commerce positively connected to minimum annual internet costs (Solaymani et al.,

2012). The familiarity of the owners of the sample enterprises with Iran’s small industries

and industrial parks organization website influenced their motivation to adopt and apply

electronic commerce (Solaymani et al., 2012). In addition, Solaymani et al. noted that

financial issues and uncertainty in the electronic commerce market decreased the

tendency of SME owners to use electronic commerce and were the most significant

barriers for the owners of sample SMEs to use and adopt electronic commerce.

Learning Organization

In an attempt to examine the key factors of entrepreneurial failure in Sfax, a

region in Tunisia, Omri and Frikha (2011) found several pieces of evidence through a

qualitative study. Initial capital and indicators of human capital, namely experience in the

business sector, the age of the microentrepreneur, the lack of training in entrepreneurship,
 29
and the level of education, were among the most important factors of SMEs (Omri &

Frikha, 2011). Low commitment and insufficient wealth of the human, financial, and

environmental capital of microentrepreneurs represented the main obstacles that limited

the opportunity for success in microenterprises (Omri & Frikha, 2011).

A sample of 22 countries gathered from the Global Entrepreneurship Monitor was

suitable for examining the sociodemographic profile of entrepreneurs to determine how

entrepreneurial traits influence enterprise creation (Álverez-Herranz, Valencia-De-Lara,

& Martínez-Ruiz, 2011). The characteristics of entrepreneurs influenced entrepreneurial

conduct positively and considerably in the following points: prior experiences, age, and

educational level of the founder (Álverez-Herranz et al., 2011). On average, male

entrepreneurs started a business with experience, they completed secondary education,

and their ages ranged primarily from 25 to 34 years or from 55 to 64 years (Álverez-

Herranz et al., 2011). Female entrepreneurs had higher educational levels than their male

counterparts on average, and their ages ranged primarily from 35 to 44 years (Álverez-

Herranz et al., 2011). In high-income countries, the average age of female entrepreneurs

was between 35 and 44 years, whereas in medium-income countries, entrepreneurial

women were between 18 and 24 years old (Álverez-Herranz et al., 2011). According to

Ramayah et al. (2012), the differences between people with prior experiences and

individuals without prior experiences in terms of entrepreneurial characteristics,

behaviors, and intention were significant. Entrepreneur education exposes learners to

certain real-life concerns such as managing a business and is useful for building and
 30
developing entrepreneurial skills, attitudes, and behaviors, which is the objective of

entrepreneurial education (Ramayah et al., 2012).

In a quantitative study, Ming-Chu (2013) explored the effects of high-

performance human resource practices and entrepreneurship on the entrepreneurial

performance of SMEs. The results confirmed that high-performance human resource

practices in SMEs could encourage entrepreneurship among employees (Ming-Chu,

2013). Although SMEs entrepreneurship meaningfully affects entrepreneurial

performance, and it somewhat mediates the relationship between high-performance

human resource practices and entrepreneurial performance (Ming-Chu, 2013). Aїt

Razouk’s (2011) study on high-performance work systems (HPWSs) and the

performance of French SMEs indicated enterprises that adopted HPWSs were capable of

obtaining good performance and were also able to keep the same performance in the long

run. The results also confirmed there was a causal relationship between HPWSs and

performance indicators of French SMEs (Aїt Razouk, 2011). Human resource practices

were the primary indicator of future fundamental performance (Aїt Razouk, 2011).

Simultaneous and longitudinal correlations existed between HPWSs and all performance

indicators, and having control of past performance did not eliminate the link between

HPWS and future performance (Aїt Razouk, 2011).

Similarly, Kroon, Voorde, and Timmers (2013) applied the AMO model in a

quantitative study to investigate whether the implementation of high-performance work

practices (HPWPs) depends on resource scarcity, as reflected in the size of the enterprise

and on strategic decision making in small enterprises connected to the owner’s expertise
 31
and attitudes. According to Kroon et al. (2013), the AMO model includes employees’

ability-enhancing practices (A), employee motivation-enhancing practices (M), and

practices that give employees the opportunity to try a little harder (O). The results

revealed that implementation of all the AMO elements of HPWPs can be at balances with

a small firm’s resources (Kroon et al., 2013). Entrepreneurial orientation, best practice

awareness, and the human resource innovativeness of business owners lead to different

preferences when the owners are implementing HPWPs (Kroon et al., 2013).

Contrary to formal instruction, knowledge derives from a practice that enables

learning and its use in SMEs (Higgins & Mirza, 2012). Higgins and Mirza (2012)

defended the view that learning through practice based on lived experiences and concrete

issues might promote the success of owners and managers of SMEs. Owners of SMEs

that promote knowledge and human capital differ from traditional competitors regarding

their organizational culture due to the influence of knowledge on enterprises’

independence, risk management, and partnership (Bencsik & Juhász, 2012).

In 2011, Hsu, Tan, Laosirithongthong, and Leong evaluated entrepreneurial

supply chain management (SCM) competence in terms of five first-order constructs:

innovation orientation, risk-taking characteristics, proactiveness orientation, relational

capital, and coordination capability (Hsu et al., 2011). According to the findings of Hsu et

al. (2011), owners of manufacturing SMEs should develop a unique competence to get

the most out of their utility in the supply chain to face competitive global market

pressures. A company’s entrepreneurial SCM competence is a multidimensional

construct that taps specific internal competency (Hsu et al., 2011). Small- and medium-
 32
sized enterprises in the manufacturing sector tend to lack substantial financial and

tangible resources; those that provide excellent performance in a competitive global

market appear to leverage more fundamental, intangible resources that constitute their

entrepreneurial SCM competence (Hsu et al., 2011). Innovation orientation, risk-taking

characteristics, proactiveness orientation, relational capital skill, and coordination

capability are the key intangible resources of manufacturing SMEs for entrepreneurial

SCM competence (Hsu et al., 2011). Hsu et al. also noted that the performance of

manufacturing SMEs hinges upon the improvement and well-constructed handling of

SCM know-how, which can be broken down to five unique capabilities as measured by

the first-order factors.

The rational choices of organizational form and related sound managerial

practices enhance the quality of a network, which leads to the success of partnerships

(Lazzarotti, Manzini, & Pizzurno, 2012). SME owners had not entirely pursued the

choice of the ideal form of a network because of resource scarcity, as is typical challenge

in small enterprises (Colombo, Laursen, Magnusson, & Ross-Lamastra, 2012; Lazzarotti

et al., 2012). Hence, management took another significant lesson such as the limited set

of resources available within SMEs forced them to apply an even more rigorous and

structured process, which was to study appropriate contractual solutions to create

innovation networks (Lazzarotti et al., 2012). Networks are necessary for evolving

organisms to achieve success because company owners learn from their mistakes and

incoherence and start the process of changing the governance style (Lazzarotti et al.,

2012).
 33
Using networks to improve innovation performance within SMEs is a

multifaceted and complex issue (Colombo et al., 2012). SME resources are insufficient to

build and use relationships with external parties, which contrast with the case of larger

enterprises (Colombo et al., 2012). For these reasons, Colombo et al. (2012) noted SME

owners must turn strong ties into complex relationships. For example, the development of

vertical relationships with lead customers or larger suppliers is especially important for

SMEs to boost performance (Colombo et al., 2012; Uhlaner, Stel, Duplat, & Zhou, 2013).

Workforce Incapacity

In 2011, Olander, Hurmelinna-Laukkanen, and Heilman applied a qualitative

method and evaluated 15 Finnish growth-oriented and innovative SMEs from the

engineering, content and service provision, and IT industries. The key driver of the study

was to examine how SME owners use informal, especially human resource management

(HRM)-based protection mechanisms and how they influence employees in an attempt to

protect their core knowledge and innovations (Olander et al., 2011). The research

outcomes revealed that the owners of certain SMEs did not have a clear strategy for

protecting knowledge and innovation due to the lack of resources, specifically protection-

related know-how, time, and finance, to invest in such activities. Olander et al. indicated

that HRM-related protection varied across the three industries. The engineering firm

owners prioritized commitment-enhancing mechanisms and employee retention, and the

owners in the IT enterprises relied on employee recruitment procedures, education, and

training (Olander et al., 2011). The content and service providers emphasized education,

capturing and diffusing knowledge, and monitoring communication and placed less focus
 34
on fostering commitment (Olander et al., 2011). The results also showed that SME

owners do not always recognize they are using tools related to HRM as informal means

of protection, although they apply them a great deal (Olander et al., 2011).

Similarly, Teo, Clerc, and Galang (2011) examined the influence of the human-

capital-enhancing (HCE) approach and HRM system by SMEs in managing their

frontline employees. The study included a questionnaire technique to collect data from

small- and medium-sized manufacturing firms located in the state of New South Wales in

Australia (Teo et al., 2011). The study also included 104 usable responses. The findings

revealed that small- and medium-sized manufacturing firms’ strategy orientations

facilitated the contribution of the HRM function in implementing the hybrid HCE HRM

systems (Teo et al., 2011). Teo et al. (2011) noted that the HCE HRM system has both a

direct and an indirect effect on manufacturing performance outcomes, and the

performance of frontline employees mediates the effect of the hybrid HCE HRM system

on manufacturing performance outcomes. Owners of small- and medium-sized Australian

manufacturing enterprises adopt a strategic approach to managing their frontline

employees (Teo et al., 2011). The findings showed a link existed between the

contributions to HRM function and adopting HCE HRM systems (Teo et al., 2011).

The effect of HRM practices on performance occurs with the development and

support of employee participation (Allen, Ericksen, & Collins, 2013). Employee

willingness positively influences human resource practices, which enables the expansion

of business and insightful performance (Allen et al., 2013). Allen et al. also noted that
 35
employees’ contribution and turnover rates influence the relationships between SME

owners and employees.

Lack of Innovation

According to Robinson and Stubberud (2012), small businesses are the least likely

to engage in innovation but the most likely to benefit from innovation when looking at

increasing the range of products and services generated and the quality of those goods

and services. Owners of small businesses are also more likely to report that the entrance

of their businesses into new markets or production, increased market share, and enhanced

flexibility of production or service provision were highly significant effects of innovation

(Robinson & Stubberud, 2012). Although small business owners are likely to abandon

projects, and may be more successful in managing projects, they start to reach expected

results (Robinson & Stubberud, 2012).

The capability to innovate is one of the most significant factors that influence

financial performance in SMEs (Bigliardi, 2013). Innovations related to customer

improvement and those developed to differentiate themselves from competitors increase

financial performance (Bigliardi, 2013). For example, new product development meets

the needs of customers and positively influences their willingness to pay and their

preference (Bigliardi, 2013).

Robinson and Stubberud (2013) examined innovative partnerships by analyzing

the relationships between European SMEs and large businesses and their customers or

clients, suppliers, government institutions, universities, and private research and

development organizations. Robinson and Stubberud used data from the Eurostat
 36
Community Innovation 2008 survey to determine the partners most commonly used in

SMEs and large businesses. The survey included 27 European Union Member States,

Iceland, and Norway (Robinson & Stubberud, 2013). The research outcomes showed that

a higher percentage of large businesses than SMEs generally cooperate with any given

partner; however, the results varied across countries and characteristics of the partner

(Robinson & Stubberud, 2013). Suppliers and customers were the most often named for

cooperation (Robinson & Stubberud, 2013). As a result, if SME owners did not partner

with other organizations for innovation, the SMEs might find innovative actions more

difficult because SMEs cannot have the capability to seize new opportunities (Robinson

& Stubberud, 2013).

According to Burg, Podoynitsyna, Beck, and Lommelen (2012), supply

constraints have a negative consequence on identifying supply opportunities. Likewise,

demand constraints have a negative effect on identifying supply opportunities but a

positive effect on identifying demand opportunities (Burg et al., 2012). Resource

constraints direct entrepreneurs’ attention toward opportunities inside the constrained

domain rather than outside the constrained domain (Burg et al., 2012).

A value network is an interorganizational network that links enterprises with

different assets and skills and that enables the owners to seize new market opportunities

(Konsti-Laakso, Pihkala, & Kraus, 2012). Lack of experience, lack of specialization, lack

of resources for development, and lack of internal innovation capability are the major

barriers to innovation (Konsti-Laakso et al., 2012). Network participation increases SME

owners’ abilities to transform their new ideas into practices (Konsti-Laakso et al., 2012).
 37
In addition, Konsti-Laakso et al. contended that most networks rely on collaboration in

production, and the participation of their networks often requires substantial investments

to enable compatibility with the network partners’ operations. In contrast, open

innovation networks do not automatically include product cooperation, although they do

offer the participants opportunities to access innovation capabilities (Konsti-Laakso et al.,

2012).

Based on (a) Doblin’s innovation landscape model, (b) Peter and Austin’s four

core elements of entrepreneurial behavior, and (c) Treacy and Wiersema’s value disciple

model to examine the development and innovation behavior of 15 Dutch SMEs, Van Es

and Van Der Wal (2012) found the core of the enterprises’ innovation behavior consisted

of technological and business process optimization, development of competencies and

corporate culture, and cooperation. Enterprise owners who combine market innovation

and product innovation appear to have extra options and chances to grow (Van Es & Van

Der Wal, 2012). Nontechnical innovation domains have considerably gained in

importance (Van Es & Van Der Wal, 2012). Pressures related to growth, shifts in control

over the enterprise, and managerial capabilities influence corporate development (Van Es

& Van Der Wal, 2012).

Innovative actions depend on the technology capacity of the enterprise (Cosh, Fu,

& Hughes, 2012). Young enterprises that operate in the high-technology sector with

informal structures have a greater propensity to develop innovative actions (Cosh et al.,

2012). There are few differences between young and older enterprises in terms of their

ideal structures in low-technology sectors (Cosh et al., 2012). Furthermore, financial

 38
capital, strong research and development intensity, entrepreneur orientation, and

innovation networks, as well as effective strategy and managerial capabilities, enable

SMEs to gain a better innovation performance (Xie, Zeng, Peng, & Tam, 2013).

Focusing on SMEs and their peripheral innovation environment in the context of

Finnish SMEs, Varis and Littunen (2012) established a link between public support and

firm performance. Innovative firms had a more positive perception of the quality and

availability of the labor force in the region than noninnovative firms did (Varis &

Littunen, 2012). Owners of less innovative firms perceived the quality and availability of

regional public support services more positively than did the owners of innovative firms

(Varis & Littunen, 2012). In addition, the study outcomes revealed a significant

association existed between public funding support and firm performance, whereas the

relationship between public financial support and upgrading firms’ technological

competencies was revealed in the noninnovator group (Varis & Littunen, 2012).

Effect of SMEs on Employment and Economics

Small businesses comprise a significant proportion of companies in the U.S.

economy (Nightingale & Coad, 2014). Small businesses represent the force of America’s

free enterprise system and provide two out of every three new jobs, and generate more

than half of private U.S. GDP (Kim, Lee, & Lee, 2013; Nightingale & Coad, 2014).

Small businesses therefore contribute to economic growth. These businesses employ a

high percentage of unqualified workers (Nightingale & Coad, 2014). Managers should

focus on required skills to hire employees. Entrepreneurial initiative failures represent an

expensive waste of tangible and intangible resources, which is a stage that

 39
businesspeople, policy makers, stakeholders, and members of society should work

together to avoid (Azmat, Ferdous, & Couchman, 2015). A business’s existence depends

on a variety of dynamics, including firm characteristics, industry, resources, and

economic situations (Lofstrom, Bates, & Parker, 2014). New firms appear to promote the

productivity of economy, intensify market competition, and enhance economic growth

(Lofstrom et al., 2014).

The survival of SMEs is essential for the effectiveness of entrepreneurship and, as

a result, decreases unemployment rates and sustains the economic performance of a

country (Nunes & Serrasqueiro, 2012). Fox (2013) highlighted that small businesses

represent 99.7% of all employer firms, employ about half of entire private sector

employees, pay 43% of the total U.S. private payroll, have generated 65% of the net new

jobs over the last 17 years, contribute to more than half of the non-farm private GDP, hire

54% of high tech workers, and produce 16.5 times more patents per employee than large

patenting firms. In the United States, SMEs contribute to 67% employment and 61%

manufacturing sector output, respectively (Mwarari & Ngugi, 2013). Byrd, Ross, and

Glackin (2013) explained that small businesses account for about 50% of private sector

output, employ more than 50% of private sector workforce, and generate a significant

share of new jobs. SME owners need particular assistance to avoid failing (Nunes &

Serrasqueiro, 2012). After conducting a study on Russian SMEs, Shirokova et al. (2013)

noted that the economic growth of a country relies heavily on SMEs health. According to

Gao et al. (2013), an effective SME sector is imperative for durable competitive

advantage and a country’s economic growth.

 40
The SME sector is the crucial vector that promotes the growth of workforces in

any nation’s economy (Kraja & Osmani, 2013). Sustainable SMEs enable business

environment viable for employment and investment (Kraja & Osmani, 2013).

Abdulsaleh and Worthington (2013) highlighted that profitable and sustainable facilitate

innovative activities and the creation of new business, which foster the growth of

country’s economy. Governments’ officials recognize the challenges SME owners face to

access financial resources (Abdulsaleh & Worthington, 2013). Governmental incentives

and programs are available in diverse countries to ensure SME owners have easier access

to financial resources (Abdulsaleh & Worthington, 2013).

The failure of market and institutions hinders the growth of SME (Modina &

Pietrovito, 2014). Inoperative public policies can be a source of SME failure because

government regulations are essential instruments to enhance entrepreneurship and

economic prosperity (Halabi & Lussier, 2014). Halabi and Lussier (2014) suggested three

policies to promote economic growth in any country: the promotion of business freedom,

property rights, and enforceable contracts; (b) the restriction of monopoly system to

stimulate competitive actions, and (c) the facilitation of entrepreneurial and innovative

actions to boost economic growth. Hence, government officials should develop

regulations to foster small businesses and entrepreneurship (Halabi & Lussier, 2014).

In 2013, after reviewing the literature on jobs creation in the United States,

Haltiwanger, Jarmin, and Miranda concluded that small business owners are

preponderant jobs creators and their position remain significant for the U.S. economy.

Government assistance associated with well-designed regulations might be necessary to

 41
limit the challenges that face entrepreneurs, in turn, boost the overall net job creation

(Haltiwanger, Jarmin, & Miranda, 2013). For instance, higher taxation may affect growth

rates by reducing incentives to grow and the use of profits to finance sustained growth

(Lee, 2014). Regulations may make business owners reluctant to hire new workforces

(Lee, 2014). Economic growth and a flexible institutional environment can assist policy

makers to mitigate financial constraints for SME owners and enable them to seize

opportunities to access formal credit (Dong & Men, 2014).

Literature Related to Methodology and Design

Qualitative, quantitative, and mixed-methods studies have contributed to the

selection of the research design and method for this qualitative multiple case study. The

scholarly articles and doctoral studies selected provided a comprehensive method and

design for this study. The relevancy of the method and design used in the following

articles is applicable: Syed (2012), Thürer, Moacir, Stevenson, and Fredendall (2013),

Ekekwe (2013), and Gandy (2015).

Syed (2012) used a mixed-methods study to investigate the main problems and

constraints that face entrepreneurs of micro, small, and medium-sized enterprises in the

Kingdom of Saudi Arabia. Through a survey questionnaire, Syed gathered quantitative

data from 177 entrepreneurs located in Saudi Arabia and 15 purposefully selected

entrepreneurs provided qualitative data through face-to-face semistructured interviews.

Syed applied statistical procedures to identify the factors constraining the growth and

survival of entrepreneurs of SME industry in Saudi Arabia. The method and design used
 42
in Syed’s study are not relevant to the method and design I used in this study. I shared

useful insight in Syed’s article while selecting the method and design.

Using a qualitative approach, Thürer et al. (2013) developed an exploratory study

with semistructured interviews. Thürer et al. purposefully selected 23 participants that

included 14 business managers and nine owners located in São Paulo, Brazil. Thürer et

al. used open-ended questions to collect data and correlation matrices and figures for data

analysis. In their study, two researchers were in charge of each interview. Except for the

use of two investigators, the research design, and the technique of data analysis, the

method applied by Thürer et al. is relevant to the method I used in this study.

In contrast, Ekekwe (2013) conducted a quantitative study to examine the link

between institutional frameworks and growth of SMEs in the Nigerian petroleum

industry. The upstream sector of Nigeria’s oil and gas industry that included SMEs was

the target population. Ekekwe used a structured questionnaire, random sampling, and a

correlational technique to perform a quantitative evaluation. As a result, the method and

design of Ekekwe are not relevant to the method and design I used in this study.

In 2015, Gandy found that small business owners who have the passion, stay

focused on their activities, and employ an adequate workforce may achieve sustainable

business and remain profitable after 5 years of operations. Gandy obtained these findings

after conducting a qualitative descriptive multiunit case study with four small businesses

located in Denver, Colorado. Gandy used face-to-face semistructured interviews, open-

ended questions, and company documents to collect data. Gandy applied a purposive

sampling to select qualified participants and used NVivo software for coding and data
 43
analysis. Hence, the method Gandy used is relevant to this research study regarding the

use of NVivo software and a purposive sample.

Transition and Summary

The objective of this qualitative case study was to explore and describe the

experiences of restaurant SME owners regarding the strategies to financially achieve

business sustainability beyond 5 years. In this study, semistructured interviews was

suitable for collecting data via face-to-face or video Skype. In an attempt to position the

phenomenon within a theoretical perspective, I examined the research problem through

the systems theory. By adopting the systems theory, which has an association with the

concept of business sustainability, SME owners may be able to maintain their business

operation and achieve growth of their business activities (Darcy et al., 2014). Section 1

included the assumptions, limitations, delimitations, and significance of the study. In

addition, Section 1 included a review of the relevant professional and academic literature

to position this research within the current state of knowledge.

The examination of SME sustainability using different research methods such as

quantitative, qualitative, and mixed methods did not produce the causes of business

failure (Bencsik & Juhász, 2012; Hamrouni & Akkari, 2012; Keener, 2013). Researchers

use the qualitative research approach to align the research question with the phenomenon.

Qualitative researchers offer interviewees the possibility to share a detailed description of

their experiences, including their thoughts and meaning of their lived experience

(Wisdom, Cavaleri, Onwuegbuzie, & Green, 2012).

 44
In Section 2, I cover the methodological aspects of this research project. I also

discuss and explain my role as the researcher, the selection of participants, the research

methods and design selection, population, and sampling. In addition, Section 2 includes

ethical research considerations, the data collection and analysis techniques, and data

reliability and validity. Section 3 includes the research findings, the application to the

professional practices of business, and the implications for social change. Section 3 ends

with reflections and recommendations for action and further study.

 45
Section 2: The Project

The objective of this qualitative multiple case study was to explore the strategies

that SME restaurant owners used to financially achieve business sustainability and

decrease the high failure rate of SMEs in the United States. It is important for some

restaurant owners to understand success strategies of business owners who have operated

beyond 5 years. The main topics in this section are the (a) purpose statement, (b) role of

the researcher, (c) participants, (d) research method, (e) research design, (f) population

and sampling, (g) ethical research, (h) data collection, (i) data analysis, and (j) reliability

and validity.

Purpose Statement

The purpose of this qualitative multiple case study was to explore the strategies

that SME restaurant owners used to financially sustain their businesses beyond 5 years.

The target population consisted of four SME restaurant owners located in the southern

region of the United States who have implemented strategies that enabled them to

financially sustain their business operations for more than 5 years. The implication for

positive social change included potential restaurant management decisions that would

help restaurant owners to enhance their profitability with new job creation and reduce the

rate of SME failure. The findings of this study might contribute to positive social changes

by enabling business practices information for SME owners that might increase the

success rate of SME owners and, in turn, reduce the unemployment rate and increase

revenue.
 46
Role of the Researcher

My role as the researcher was to design the study, plan the technique of data

collection, and obtain the approval of the Walden University Institutional Review Board

(IRB) to conduct this study. During the data collection stage, individual participants

responded to seven open-ended questions through face-to-face interviews or by video

calling Skype to explore the experiences and perceptions of business owners who

represented the target population (Moss & O’Neill, 2014). I also reviewed company

documents, such as loss and profit documents and financial statements. Through a

multiple case study technique, I was able to explore and describe respondents’

understanding and interpretations of the research question in a way that captures the

inherent nature of the phenomenon under study (Bevan, 2014; Moss & O’Neill, 2014).

The protection of the respondents’ rights and the development of a reliable relationship

with those respondents help avoid ethical issues and ensure the integrity of the research

(Vanclay, Baines, & Taylor, 2013). Qualitative researchers should be competent during

interviews and avoid exercising excessive control over the respondents to enable

respondents to follow new leads (Bernard, 2013).

The Belmont Report (1979) included two major guidelines to ensure the

protection of participants’ rights during the research process: (a) participant protection

and optimal benefits that participants can gain from the research or (b) beneficence and

justice. Brakewood and Poldrack (2013) confirmed that the Belmont Report adoption

served to promote the rights of participants and to ensure participants would have access

to an informed consent note. The consideration of the principles of ethical research, the
 47
informed consent letter (see Appendix A), and the Belmont Report are fundamental to

achieving ethical research.

I have been involved in the managerial practices of small businesses for 15 years

while serving as a financial manager and an external auditor. I used this experience

combined with my knowledge of previous studies on business strategies to gather

appropriate data from participants. I am not a restaurant owner and I have no personal

relationships with SME restaurant owners in the southern region of the United States. It is

imperative to work with respondents throughout the data collection process to avoid any

personal bias that could influence the respondents’ responses. In this research, strict

adherence to the defined research guideline helped promote the validity of the collected

data (Robinson, 2014).

Participants

I selected the participants from an existing list of SME restaurants located in the

southern region of the United States. Qualitative researchers rely on the research question

to select a small number of knowledgeable participants of the phenomenon to gain

relevant data collection (Cleary, Horsfall, & Hayter, 2014). Brorson, Plymoth, Őrmon,

and Bolmsjő (2014) considered experience and current status of participant occupation to

select study participants. In this study, I used the following eligibility criteria: (a) be an

SME restaurant owner who has successful financial strategies to sustain business, (b) be

in the restaurant business at least 5 years, (c) the SME restaurant location must be in the

southern region of the United States, and (d) the restaurant owner must be older than 18

years. The eligibility criteria were important for selecting the participants. Iaquinto
 48
(2014) selected successful restaurant owners to conduct a study on sustainable practices

among independently owned restaurants.

I emailed cover letters of introduction to restaurant owners located within the

southern region of the United States. I made follow-up telephone calls to discuss the

study and ask restaurant owners to participate. Participants who participated in the study

received an informed consent form through a subsequent e-mail notification. The consent

form specified the research purpose and ethical considerations, including the process of

agreeing to participate and the ability to withdraw from the study at any time. Participants

needed to give their consent by replying to the consent form e-mail with the words, I

consent, to indicate their willingness to participate in this study freely, with a clear

understanding of its purpose, the rights of participants, and no intent to cause harm to

participants or their business activities. After I received the informed consent letter, I

contacted participants via a telephone call to schedule the interview at the convenience of

each participant.

Prior the commencement of the interview, I explained the purpose of the study,

described the interview process, and provided clarity for each participant to establish a

working relationship. By maintaining great relationships with participants throughout the

study, participants feel confident in sharing information with researchers (Johnson,

2014). A better relationship between researcher and participants enable insightful data

through research interviews (Brett et al., 2014; Twigg & McCullough, 2014). As

suggested by Thomson, Michelson, and Day (2015), I organized interviews at the

convenience of participants to further strength relationship building.

 49
Eligible participants of this study must be SME restaurant owners who have

strategies to financially sustain their businesses beyond 5 years. The selection of SME

restaurant owners group aligned with of the overarching research question of exploring

what strategies restaurant owners used to financially sustain their businesses beyond 5

years. Business owners behave as the primary decision makers and are able to provide

rich information to elucidate the research question (O’Donnell, 2014).

I will ensure the respect of participants’ privacy and confidentiality throughout

and after the research procedure. As required in the IRB regulations, the destruction of all

collected data will occur after storing them in a secure place for 5 years. The substance of

interview research depends on the social relationship between researcher and participant,

which depends on a researcher’s ability to create a stage where participants feel free and

safe to express their voice about a phenomenon (Gemignani, 2014; Seitz, 2016).

Research Method and Design

This subsection includes a discussion on conducting qualitative research for this

study. This subsection includes an explanation of the research method and case study

research design and the rationale for retaining the qualitative method for this study.

Bansal and Corley (2012) noted that it is imperative to identify and understand a

phenomenon before attempting any exploration.

Method

The research was effective because of its qualitative multiple case study approach

to exploring the experience of four SME restaurant owners regarding the strategies to

financially achieve business sustainability beyond 5 years. The qualitative research

 50
method may lead to a holistic understanding of SME restaurant sustainability or success

in the southern region of the United States. The use of a qualitative method supported a

detailed exploration of the phenomenon because the respondents in this study were major

actors of daily business operations. The perception of the respondents may lead to a

contrary view of the researcher. Moustakas (1994) emphasized that a qualitative method

leads to a broader perspective of the entire issue because researchers rely on a

comprehensive approach to deciphering the phenomenon. Gordon (2011) noted that

positivist qualitative researchers apply questions to gain insight and develop a

multifaceted description of experiences in an attempt to initiate learning about a

phenomenon. Using a qualitative method enables researchers to discover the reasons that

contribute to the phenomenon according to the participants’ meaning and perception.

The reason for selecting the qualitative method for this study was the exploratory

character of the study and research questions to which respondents can provide their

opinions and perceptions (Gill, 2014; Povee & Roberts, 2014). SME owners may provide

detailed explanations of their organizational experience regarding the phenomenon under

consideration (De Massis & Kotlar, 2014). Quantitative methods could also be useful for

this study, but the meanings and the perceptions of SME owners would be missing. The

qualitative method differs from quantitative or mixed methods approaches, both of which

have proving or disapproving specific hypotheses as the primary objective (Beail &

Williams, 2014; Kaczynski, Salmona, & Smith, 2014). Mixed-methods research does not

qualify for this study because the approach was the combination of qualitative and

quantitative method, which requires more resources and time that may influence the
 51
research process (Harrison, 2013). Hence, the qualitative method was suitable for

exploring strategies for SME restaurant owners to financially achieve business

sustainability beyond 5 years.

Quantitative or mixed-methods designs were not suitable for the present study

because these research approaches involve obtaining information from multiple data

points quickly instead of relying on a single phenomenon (Moustakas, 1994; Venkatesh,

Brown, & Bala, 2013). The quantitative research method was not applicable for this study

because quantitative research involves structured data in numerical form or data that

enable changes into numbers (Turner et al., 2013). A quantitative study would be

appropriate if the research question was set to test a hypothesis (Bernard, 2013).

Likewise, researchers apply a mixed-methods approach to triangulate data, which is

useful for supporting the quantitative and qualitative aspects of the study. A mixed-

methods approach is time consuming, and its adoption may influence the required

deadline to accomplish the study. Qualitative research was the best research method for

this study because the research questions were suitable for exploring the real-life

experiences of the participants.

Design

I used a qualitative multiple case study design to understand how SME restaurant

owners had experienced business sustainability in the southern region of the United

States. In this study, one-on-one, semistructured face-to-face or video Skype interviews

were the means to gather data. During the process of data collection, I also reviewed

company documents, including loss and profit and financial statements. The reason for
 52
using semistructured interviews was to develop a deep awareness and understanding of

what participants believed about their experiences toward the strategies of business

sustainability. Baškarada (2014) noted that case study design enables researchers to

capture a deep holistic view of the research question, which facilitates the description and

explanation of the phenomenon in a real-time context. The aim of case study design was

to seek the common and particularity of the phenomenon through multiple data sources

(De Massis & Kotlar, 2014; Hyett, Kenny, & Dickson-Swift, 2014). Using open-ended

questions facilitates participants’ recollection. A qualitative multiple case study design

was more appropriate than other qualitative designs because the essence of the study was

to gather real experiences of SME restaurant owners and interpret their meaning about

the strategies to financially achieve business sustainability.

Case studies require a consideration of specific situations that allow researchers to

investigate a phenomenon (Cronin, 2014), but researchers act differently in other

qualitative designs to explain a phenomenon. For my study, I could have considered a

phenomenological approach. Phenomenological researchers explain phenomena from the

lived experiences of participants (Harrison, 2014). The aim of phenomenological inquiry

is to learn participants’ understanding of the study question (Gill, 2014; Mayoh &

Onwuegbuzie, 2014). Cronin (2014) noted that case studies involve diverse data

collections tools in the course of a long period, such as observations, documentation, and

interviews. The multiple case study design was the best design because it enabled me to

explore and understand participants’ experiences within a real context.

 53
As suggested by Fusch and Ness (2015), I used a purposive sampling procedure to

ensure data saturation. Qualitative researchers often make decisions related to the

adequacy of their sample based on the notion of saturation (O’Reilly & Parker, 2012).

O’Reilly and Parker (2012) also defended the view that adequacy of sampling relates to

the demonstration that saturation has occurred, which means that the study has reached a

richness of information. I continued interviewing participants until no new information

emerges to ensure data saturation. The data saturation procedure entails bringing new

interviewees into the study until the data set is complete, as specified by data duplication

or redundancy (Marshall et al., 2013). I used methodological triangulation to compare

data from interview results and restaurants documents to evaluate the evidence of data

saturation. Triangulation is a procedure that enables researchers to reach data saturation

(Fusch & Ness, 2015).

Population and Sampling

This subsection includes a discussion on how population and sampling strategies

reinforce the rigor in the qualitative research process. A well-developed sampling method

improves the validity of any study and the quality of collected data (Robinson, 2014).

This subsection includes detailed discussions on (a) the population and sampling method,

(b) sample size justification, (c) data saturation, (d) criteria for selecting participants, and

(e) interview setting.

Population and Sampling Method

The target population for this study consisted of SME restaurant owners located in

the southern region of the United States. Purposive sampling was suitable for selecting
 54
four participants. The goal of sampling is to reach adequate sources of data that

researchers gather by illuminating the lived experience of participants (Gill, 2014; Suri,

2014). Purposive sampling enabled the alignment of the goal of this study and the

selection of the participants who have experienced the phenomenon under consideration

(Bernard, 2013). Purposive sampling was appropriate for this study because the

participants must have experience with characteristics of business sustainability.

Sample Size Justification

Four SME restaurant owners participated in semistructured interviews to share

strategies they used to financially sustain business beyond 5 years. According to Yin

(2014), a sample size of two or three cases is sufficient to conduct a qualitative multiple

case study. Marshall, Cardon, Poddar, and Fontenot (2013) indicated that there are no

standard guidelines for selecting a set number of participants. In this study, the selection

of four SME restaurant owners was appropriate to explore the phenomenon under

consideration. The sample size that includes more than 10 participants could influence

the richness of data (Rowley, 2012).

Data Saturation

To ensure data richness and data saturation, I did not recruit additional

participants. Qualitative researchers should determine sample size based on the

information of saturation (O’Reilly & Parker, 2012). Data saturation occurs when no new

data emerge from the interviewees and emergent themes become similar (O’Reilly &

Parker, 2012). Walker (2012) confirmed that data lead to a saturation point when

qualitative researchers can no longer distinguish additional themes.

 55
Criteria for Selecting Participants

Eligible participants were older than 18 years and were SME restaurant owners

who complied with business regulations of the southern region of the United States.

Eligible participants must have real-life experiences of strategies to financially sustain

their businesses beyond 5 years. Furthermore, the location of the SME restaurants was

within the southern region of the United States. To prevent potential bias in sample

selection, the selection of participants was in the order in which they accepted the

invitation to participate in the interview.

Interview Setting

The setting of the study was in the southern region of the United States, and

included participants of this location. The semistructured face-to-face or video Skype

interviews took place for approximately 30 to 45 minutes. The personal semistructured

interview allows a flexible medium of communicating freely about the phenomenon

under consideration between participants and researcher (Anyan, 2013). Respondents

have the motivation to speak candidly during face-to-face interview format (Anyan,

2013). Both personal face-to-face or video Skype interviews enable the respondent and

qualitative researcher to be in each other’s physical presence, and to see each other

entirely (Deakin & Wakefield, 2014; Seitz, 2016). Participants feel comfortable and

willing to share their experiences when researchers consider their time constraints, space,

and culture, and enriched data could result (Mukeredzi, 2012). Malone, Nicholl, and

Tracey (2014) posit that well-designed interview protocols enable the reduction of

personal biases which can contribute to valuable data collection.

 56
Ethical Research

In this study, I followed a series of ethical guidelines that ensured the protection

of participants’ rights (see Appendix A). Researchers must receive IRB approval before

collecting any data. The major objective of the IRB is to verify that the researcher will

follow the ethical standards of treatment of human participants (Klizman, 2013).

Aluwihare-Samaranayake (2012) noted that qualitative researchers have an obligation to

understand and judiciously consider ethics, honesty, and integrity. The completion of the

National Institute of Health’s web-based training on extramural research demonstrates

my understanding of ethical considerations regarding the protection of human

participants. I began to recruit eligible participants after I received the Walden University

IRB approval number 03-03-17-0365649.

All participants needed to agree with an informed consent form (see Appendix A)

by replying to the e-mail with the words, I consent, to indicate their voluntary

participation. Participants had the right to retract their statements or withdraw from the

study without prejudice as mentioned on the consent form (see Appendix A).

Participants who chose to withdraw did not need to follow any standard procedure, as the

study did not include any experimental techniques. Participants had time to review the

transcription of their interview to ensure its conformity to their intended message.

Participants did not receive monetary compensation for their participation, but they could

receive an indirect benefit such as a copy of the completed study.

The study included coding techniques to protect the confidentiality of

participants’ data and their organizations, and personal identifying information cannot be
 57
available to third parties. I assigned a code for each participant during the study, namely

P1, P2, P3, or P4 to protect the identity of each participant. All data from participants and

their organizations in this study were in a personal password-protected hard drive and

remained in a fireproof safe for 5 years. The destruction of all data will occur 5 years

after the acceptance of this study by erasing electronic data and shredding paper

documents to protect the rights of the participants.

Data Collection Instruments

As highlighted in the role of the researcher, this study included semistructured

interview questions, profit and loss documents of each year, and financial statement as

the instruments. The semistructured interviews involve preparing questions guided by

well-defined themes in a consistent and systematic manner interposed with probes

designed to elicit responses that are more elaborate (Orobia, Byabashaija, Munene,

Sejjaaka, & Musinguzi, 2013). The interview questions must reflect the research

objectives (see Appendix C). A well-organized semistructured interview leads to reliable

data quality, detail, and depth (Block & Erskine, 2012) and reinforces the choice of the

instrument. In addition, Tong et al., (2013) recognized that semistructured interviews

associate an interview guide structure with the flexibility of deepening a richness of data

collection. Using an interview guide (see Appendix D) and an interview protocol (see

Appendix E) helped me to ensure the effectiveness of rigor and freedom necessary for the

quality of collected data.

An interview guide associated with the overarching research question and

including the interview questions served as the primary instrument of data collection.
 58
Qualitative research questions that include the words how or what reflect the

characteristics of open-ended questions that enable researchers to explore the

phenomenon from the participants’ experiences (Doody & Noonan, 2013; Gill, 2014).

According to Wheeler and Bell (2012), researchers use open-ended questions to gain a

comprehensive view of participants’ responses. The use of company documents enabled

to triangulate the investigation. The triangulation is a useful technique to increase the

study reliability when researchers apply many data sources to explore phenomena (Yin,

2014). In a process known as member checking, participants reviewed my interpretations

of their previously recorded interviews (Grossoehme, 2014), and a follow-up phone call

took place to ensure the accuracy of participants’ meanings.

Data Collection Technique

Small businesses websites and public records were sources for potential

participants. E-mail and mailing address were the means used to contact participants and

to ensure the fulfillment of the requirements regarding purposive sampling. The respect

of ethical considerations throughout the research processes is important to ensure the

validity and reliability of the study (Rubin & Rubin, 2012; Wallace & Sheldon, 2015;

Wertz, 2014). Semistructured one-on-one face-to-face or video Skype interviews served

to collect data with the respect of each participant convenience. I also gathered secondary

data through company documents. Semistructured face-to-face interviews enable the

flexibility of the interview and researcher can ask probing questions to clarify

participants’ responses (Doody & Noonan, 2013). Moreover, Vogl (2013) confirmed that

qualitative researchers can gather relevant data through face-to-face interviews. Deakin
 59
and Wakefield (2014) noted that video Skype interviews include several advantages:

cost-effectiveness, access to dispersed participants, flexibility of participant and

researcher in term of interview time, support for global research objectives, and

withdrawal of respondents with the click of a button.

The disadvantages of face-to-face interviews are researchers can influence

participants’ responses; thus, researchers may distort the interview results (Vogl, 2013).

The use of reflexive practices is essential for researchers to mitigate personal biases

(Probst & Berenson, 2014). The disadvantages of video Skype interviews include

logistical issues which can influence the relationship between participants and researcher

(Deakin & Wakefield, 2014).

At the beginning of the data collection process, participants had the right to know

a researcher’s commitment to guaranteeing the security and confidentiality of

participants’ data and their organizations. I asked participants to sign an IRB consent

form, and they had access to my contact information as well as the current information

related to the university IRB representative to provide detailed answers about the study.

Each participant was asked permission to record the interview. If the participants did not

provide such permission, I would manually record the interview in a research journal.

With the approval of each participant, I recorded the interviews using a digital voice

recorder. I took handwritten notes during the interviews and used my laptop as a backup

to prevent data loss when the voice recorder fails. After my personal introduction to each

participant, the participants introduced themselves, identified their organization, and

highlighted their experience for achieving business sustainability for at least 5 years. The
 60
interview continued by asking each participant the primary interview questions listed in

Appendix C. At the conclusion of each interview, I thanked the participants and reminded

them about the process of reviewing interview transcripts and potential follow-up

questions.

After performing these steps, the data organization and analysis began through the

methodological triangulation techniques. The NVivo 11 qualitative data analysis tool

served to identify themes and document the findings. I used member checking strategies

to ensure data accuracy by e-mailing participants my interpretations of the collected data

to enable participants the opportunity to review their responses. Member checking is a

technique qualitative researchers use to review participants’ responses to ensure the

quality of data (Harvey, 2015). Therefore, member checking technique allowed

participants to validate or revise my data interpretation.

Data Organization Techniques

Following the research interview protocol and the interview guide helped me to

maintain the consistency of data collection and organization. Interview protocols are

useful for qualitative researchers to keep the interviews on track and ensure they collect

the needed data (Jacob & Furgerson, 2012). The use of a research journal, the possibility

of record and transcribe the interviews verbatim, and the need to remove the personal

information of the participants and their organizations ensured the confidentiality of the

study. According to Blom, Gustavsson, and Sundler (2013), participants may feel

reluctant to disclose the truth due to concerns of confidentiality, and qualitative

researchers must protect participants throughout the research procedure to reduce

 61
researcher bias. I assigned the code Pi, (where i = 1, 2, 3, 4) to each participant. For all

four participants, the interview data folder included the range of P1 through P4, and I

screened all collected data to ensure participants’ confidentiality. A password-protected

electronic folder helped me to ensure the protection of the recorded interviews, interview

transcripts, company documents interpretation, and the results from NVivo 11. All

collected raw data will remain in a fireproof safe for 5 years. Except my supervision, no

one else can have access to the password-protected electronic folder and safe, and to

protect the rights of participants, the destruction of all data will occur 5 years after the

acceptance of the study.

Data Analysis

Data analysis in qualitative research is an iterative process, which involves

reflective thought throughout a well-organized and comprehensive process of data

reduction, data organization, and interpretation of written texts (Tong et al., 2013).

Qualitative researchers focus on interview questions (see Appendix C) that support the

central research question to explain phenomena. In this study, the overarching research

question was as follows: What strategies do SME restaurant owners use to financially

achieve business sustainability beyond 5 years? Qualitative data analysis requires

accurately transcribed interviews. Wahyuni (2012) noted the accuracy of the interview

transcription is crucial because researchers rely on interview content for data analysis.

Upon approval of the interview transcription, I followed Yin’s (2011) five steps to

complete the data analysis. Yin’s (2011) data analysis technique includes the following
 62
five steps: (a) compiling the data, (b) disassembling the data, (c) reassembling the data

into themes, (d) interpreting the data, and (e) concluding the data.

After completing the coding process, I transferred the data into NVivo 11

software for final analysis and theme identification. Qualitative researchers use NVivo

software for data management with a systematic methodology to code data into common

themes and terms (Grossoehme, 2014; Ishak & Bakar, 2012). NVivo 11 software helped

me to code words and sentences from interview results, notes, and company documents

related to the central research question. This method of data analysis assisted in

categorizing themes and patterns that might emerge from the responses of SME

restaurant owners. I then processed the data interpretation and develop conclusions.

My responsibility was to identify trends, patterns, and themes that might be useful

for SME restaurant owners to financially achieve business sustainability beyond 5 years.

I focused on data analysis from different case studies to gain an insightful view of a

phenomenon to uncover patterns, concepts, and comprehensive understanding of the

phenomenon. Identifying themes and patterns helped me to comprehend the key

information of strategies that was significant for SME restaurant owners to financially

sustain their businesses beyond 5 years. Throughout the process of data analysis, I

continued to correlate the key themes of related studies, the general systems theory, and

newly literature findings to capture any additional data as advised by Yin (2014).

Reliability and Validity

Reliability and validity are essential to establishing the quality of research

outcomes for a qualitative case study. Reliability refers to the consistency and the
 63
repeatability of research procedures through the different stages of data collection,

analysis, and interpretation (Morse, 2015). Validity refers to the accuracy of research

findings and enables researchers to reach evidence (Peck, Kim, & Lucio, 2012).

Reliability

Loh (2013) noted that qualitative researchers often refer to trustworthiness criteria

for research evaluation while quantitative researchers draw on concepts of validity,

reliability, and generalizability. According to Marshall et al. (2013), rigorous qualitative

researchers can improve the reputation of qualitative research. Using a rigorous research

method helped me to enhance the reliability of the study. The evaluation of the quality of

qualitative research relies on four criteria: credibility, transformability, dependability, and

confirmability (Petty, Thomson, & Stew, 2012; Wahyuni, 2012). In this study,

dependability was the focus through which to demonstrate reliability. Dependability is

the extent to which a study is repeatable or replicable throughout different research

techniques (Petty et al., 2012; Wahyuni, 2012; Yilmaz, 2013). Qualitative researchers

reach dependability by providing a detailed explanation of the research design and

procedure to enable future researchers to follow a similar research framework (Wahyuni,

2012).

Validity

Validity refers to the consistency throughout the research process over time and

across diverse researchers and different research techniques (Yilmaz, 2013). Qualitative

researchers rely on confirmability, dependability, transferability, and credibility to

express the postpositive concepts of objectivity, reliability, external validity, and internal
 64
validity (Rapport, Clement, Doel, & Hutchings, 2015; Vaismoradi et al., 2013). In this

study, credibility, transferability, and confirmability served to indicate the validity of the

study.

Credibility refers to data accuracy reflecting the social phenomenon under

investigation (Wahyuni, 2012). Member checking is a critical strategy for establishing

credibility (Petty et al., 2012). Qualitative researchers described reflexivity, peer

debriefing, and member checking as strategies to establish credibility (Morse, 2015;

Probst & Berenson, 2014). In this study, reflexivity, member checking, and transcript

review served to confirm research credibility. Transferability refers to the degree of

applicability into other settings or contexts (Petty et al., 2012; Jones & Hamilton, 2013).

Studies built on rich descriptions of demographic and geographic boundaries can be

transferable (Woolfall et al., 2013). Confirmability reflects objectivity in quantitative

terms, which occurs when it is possible to characterize the study with a truthful

interpretation of the collected data (Garside, 2014; Morse, 2015). Member checking and a

reflexivity journal are useful for promoting confirmability (Petty et al., 2012). The

research design serves to enhance the confirmability of a study (Zackariadis, Scott, &

Barrett, 2013). Using member checking in this study improved the validity because

qualitative researchers use this strategy to verify the accuracy of the collected data or data

interpretation (Harper & Cole, 2012).

Saturation is a technique researchers use to ensure the adequacy and quality of

data (Walker, 2012). Data saturation requires continual sampling until repetitive
 65
interviews responses occur (Marshall et al., 2013; Walker, 2012). In this study, the

sample size may be over four if saturation has not yet occurred at this point.

Transition and Summary

Section 2 included an overview of the strategy for exploring the experiences of

SME restaurant owners regarding the strategies they used to financially achieve business

sustainability in the southern of the United States. The obligations of the role of the

researcher include a reliable and valid study; a participant selection procedure; criteria for

selecting method and design; standards for review and sampling of participants;

principles to safeguard ethical research; and data collection, organization, and analysis

with implications for the reliability and validity of the study. The consideration of

purposeful sampling, semistructured interviews, and company documents accessibility

with a rigorous research technique may lead to detailed explanations from the

participants. Section 3 includes the outcomes of the study and a discussion on application

to professional practice. In addition to the presentation of significant findings, Section 3

includes the implications for social change, recommendations for action, and

recommendations for further research. The section ends with the researcher’s reflection

and a summary of the study.

 66
Section 3: Application to Professional Practice and Implications for Change

In Section 3, I provide the findings of the research on strategies that SME

restaurant owners used to financially sustain their businesses beyond 5 years. I collected

the research data from four successful restaurant owners and company documents such as

financial statements and profit and loss documents. This section includes a presentation

of findings, application to professional practice, implications of social change,

recommendations for action, recommendations for further research, reflections, and a

study conclusion.

Introduction

The purpose of this qualitative multiple case study was to explore the strategies

that SME restaurant owners use to financially sustain their businesses beyond years. I

interviewed four SME restaurant owners from the southern region of the United States

with at least 5 years of business operation experience for this study. The general systems

theory was the foundation of the conceptual framework.

I used semistructured interviews to collect data and shared company documents

such as profit and loss documents and cash flow statements with participants as well.

Participants answered seven interview questions (see Appendix C). Data collected and

analyzed from participants helped to answer the overarching research question: What

strategies do SME restaurant owners use to financially sustain their businesses beyond 5

years? After the data analysis, I identified the emergent themes: market research, great

customer services, and having passion.

 67
Presentation of the Findings

The overarching research question of this study was: What strategies do SME

restaurant owners use to financially sustain their business beyond 5 years?

Semistructured interview questions served to explore the strategies participants used to

financially sustain business beyond 5 years. The significant part of data derived from the

participant interviews. I used company documents such as profit and loss documents and

cash flow statements to triangulate interview data. The data triangulation technique

contributes to the study reliability when researchers use multiple sources to explore

phenomena (Yin, 2014).

During the data collection process, I asked additional questions to clarify

participants’ responses. I used member checking technique to validate participants’

responses and improve the quality of data collected. Qualitative researchers use member

checking to ensure the accuracy of data collected (Harvey, 2015). The member checking

technique helps the researcher improve validity of the study (Grossoehme, 2014).

I ensured the confidentiality of participants and their company identity. After an

attentive analysis of collected data from participants and company documents using Yin’s

(2011) data analysis process, I entered the data into NVivo software tool. The following

three major themes emerged: market research, great customer services, and having

passion.

The general systems theory was the conceptual framework of this study. I used

the general systems theory and previous studies to explain the findings. The three major
 68
themes were in alignment with the general systems theory and helped to understand what

strategies restaurant owners use to financially sustain their businesses beyond 5 years.

Emergent Theme 1: Market Research

The first major theme to emerge was conducting the market research. All of the

four participants mentioned market research as a strategy to sustain their businesses

beyond 5 years. Participants stated market research helps them to mitigate competitive

forces and promote products that meet customers’ needs. I will discuss in detail the

emergent theme market research and then will follow a discussion of other three

strategies used for achieving sustainability as indicated by participants: cutting costs,

location, and price fairness.

All four of the participants were able to sustain their businesses because they

gained sufficient information for conducting market research to make effective business

decision (see Table 1). Participants noted market research enables them to understand

business environment. P1 said knowing the business environment is important to sustain

business. P1 added that he often conducts market research to update his food menu with

competitive prices. P2 revealed that the business is slow sometimes, but the business can

remain profitable when the owner understands the market trends to make changes. Being

able to identify, understand, and forecast market factors contributes to greater business

performance (Bonney, Davis-Sramek, & Cadotte, 2016). P4 reported conducting market

research routinely helps business owners to check how competitors are doing to make

change to existing strategies. Not paying attention to external factors such as competitive

forces, consumer market changes, and changes in consumer disposable revenue affect the
 69
restaurants success (Hua, Xiao, & Yost, 2013). P3 stated that market research strategy

contributes to business success because he gains information on competitors and

suppliers to provide good quality of foods at a competitive price. P3 also revealed that he

started making profit when he began the business and was right to do the market research

prior to launch the business, which helped uncover the food business as the right needs

for his community.

Table 1

Strategies Participants Used for Sustainability

Participant responses Number Percentage

Cutting costs 3 75%
Location 3 75%
Price fairness 4 100%
Market research 4 100%

The review of company documents including financial statements, profit and loss

documents, and cash flow of the four restaurants revealed ups and downs of business

revenue throughout the year. Participants confirmed the data through member checking.

All four of the participants noted weather conditions and holidays as factors that affect

their business revenue, but the market research helps them understand the market trends

to get prepared for seasonal challenges. Participants also confirmed that restaurant

activities are slow during the cold weather, because customers feel uncomfortable to go

out in the winter season, and in particular when it is windy and snowing. DeMicco (2014)

highlighted that weather, seasonal, and economic situations affect the restaurant business.

Participants adjust their strategies to remain sustainable.

 70
P1 and P2 stated that the review of cash flow statements and profit and loss

statements help them ensure sufficient cash to meet financial obligations during the low

season. P3 mentioned that small business owners should be able to work long hours

during the low season and temporary layoff some employees to save money. P4

explained the strategy to save enough during the peak season and avoid making

unnecessary expenses helps to remain operative during the low season. Small business

owners must always lower their business expenses because high expenses affect the

business profitability and sustainability (Turner & Endres, 2017). P2 pointed out that

business owner cannot take an increase in revenue as free money and spend it without

think about the upcoming expenses because the market conditions can change any time.

The general systems theory was the conceptual framework for the study. The

emergent theme market research aligned to the general systems theory because the

information gathered for conducting market research allow business owners to plan

strategies to respond to business challenges and remain sustainable. The need to adapt

strategies to face the evolving business environment aligned with systems theory of von

Bertalanffy’s (1972). Knowing and adapting market factors leads to superior business

performance (Bonney et al., 2016). P2 confirmed, “Understanding market trends helps

business owners to design products and services that meet customers’ satisfaction, which

then contributes to business success.” P2 also highlighted that starting restaurant business

with new products may be difficult for entrepreneurs to succeed without conducting

market research. Participants recognized the importance to implement different strategies

to face seasonal challenges. Restaurant owners should consider the seasonality factors in
 71
their business plan. Seasonality has major consequences on small business success

(Shields & Shelleman, 2013).

Cutting costs. Three of the four participants revealed cutting costs as another

strategy to sustain business (see Table 1). P1 stated that he cuts back his overhead by

working with his family to save money for payroll, utilities, and inventories. Business

owners adopt cost management strategies by reducing labor and inventory costs to remain

operational when the revenue declines (Shields & Shelleman, 2013). Agarwal and Dahm

(2015) found that family members are reliable, readily available, and less expensive. P2

noted that restaurant owners must keep costs down to financially achieve business

sustainability because the cost is the most significant part of restaurant issues. P2 also

stated that labor costs and rent are also important costs of restaurant businesses. To be

successful, P4 researches suppliers from whom he can have inexpensive products to be

competitive. Small business owners cannot achieve profitability or sustainability while

operating with too many high expenses (Turner & Endres, 2017). P2 asserted that he

started the business with a small building to cut down electricity and rent costs; he did

that because he want to be successful. Small business owners have to simultaneously

manage business expenses (Turner & Endres, 2017).

Location. Three of the four restaurant owners indicated the importance of

business location as another strategy to financially achieve sustainability (see Table 1).

P4 did not focus on business plan but he analyzed the location needs and found out he

can succeed with restaurant business. People were moving into that location when he

started the business and few restaurants were operating at that time, as mentioned P4. The
 72
business location influences restaurant sustainability (Self et al., 2015). P3 shared that he

did not wait longer to start his business when he noticed the food service to be the need

for his neighborhood. P1 stated that the growth of his community has contributed to the

growth of his business. P1 also confirmed that when his town grows his business grows

as well and he makes a profit. The business location is key determinant of employees,

customers, and operating costs (Banwo et al., 2015).

Price fairness. All four participants mentioned price fairness as another strategy

to financially sustain business beyond 5 years (see Table 1). P2 indicated the necessity to

look at competitors prices in his business area to see what price option is needed to

sustain business. P3 explained that he focuses on pricing strategy because he knows

customers can get the same foods in different places then he does not overprice even

underprice his products. P3 emphasized that he is operating in competitive environment

but he is able to sustain business by practicing price fairness. Price unfairness can affect

customers satisfaction (Yim, Lee, & Kim, 2014). P1 noted that he always keeps food

prices down to gain customers’ trust. The practice of price fairness is important for small

business sustainability as mentioned by P4. P4 also shared that customers are unhappy

when they perceive the products or services are overpriced and that affects the business

reputation and therefore a decrease in sales can follow.

Emergent Theme 2: Great Customer Service

The second theme identified as a strategy that sustained restaurant business

beyond 5 years was the great customer service. All the four participants indicated the

importance of building great customer service to sustain their businesses. I discuss the
 73
emergent theme great customer service in detail and then will follow a discussion of other

three strategies that helped sustain business beyond 5 years as indicated by participants:

food quality, qualified employees, and marketing.

All four of the participants revealed great customer service as a strategy for

sustaining business beyond 5 years (see Table 2). P1 explained that making customers

happy is important for sustaining business; when customers come to his restaurant, he

greets them, shake hands with them, and thanks them for coming. So customers feel

comfortable for the way he traits them as added by P1. Business owners who prioritize

customer needs are able to ensure effective strategy to gain competitive advantages

(Bengesi & Roux, 2014). To avoid losing customers, P2 communicates a lot with

customers and nicely explains why he cannot make more foods when he sells out

everything. P3 said that being nice to customers helps make customers confident to repeat

their visit. P3 also stated that his employees and he treat customers with respect way to

remain successful. Cook and Wolverton (2015) considered serving and attracting

customers is a strategy to improve business performance. P1 and P3 claimed keeping the

business place clean is important to attract customers. P4 highlighted that he is still

making money because customers are still coming; so caring about customers contributes

to business sustainability. P4 always says to his employees, everything they do is about

customer satisfaction. P4 also asserted customers’ service is the main strategy he relies on

to grow the business. Attracting new customers enables to the growth and success of

small business (Cook & Wolverton, 2015).

Table 2
 74
Strategies for Sustaining Restaurant Business Beyond 5 Years

Participant responses Number Percentage of total

Food quality 3 75%
Qualified employees 4 100%
Marketing 3 75%
Great customer service 4 100%

The emergent theme great customer service aligns with the general systems

theory, because being able to achieve great customer service requires restaurant owners

to consider multiple factors. In considering systems theory, restaurant owners capability

to assemble other components to achieve business sustainability through building great

customer service, aligns with the systems theory of von Bertalanffy’s (1972) that

suggests all parts of a system function as a whole. Restaurant owners are able to gain

additional customers, which can contribute to the growth of sales and in turn lead to

business sustainability. Restaurant owners who show respect to their employees and

customers can strengthen the reputation of their businesses, which can generate repeat

customers. Systems theory is a concept that helps understand how diverse components of

an organization work together as a whole to achieve organizational goals (Mangal, 2013;

Yawson, 2013).

The theme of ensuring great customer service is consistent with the body of

knowledge. P3 stated that business owners must ensure customer satisfaction and design

appropriate customer services to reach their goals. P3 also noted that successful business

must show respect to customers and make sure customers feel comfortable about the

service they are getting. These statements confirm the existing body of knowledge which
 75
indicates restaurant owners understand that customer satisfaction is important for

sustaining long-term business (Agarwal & Dahm, 2015). P4 responses support the

existing body of knowledge that confirms superior customer service is one of the

characteristics of high performance business (Chou, Wu, & Huang, 2014).

Food quality. Three participants recognized the need of providing a good quality

of food to sustain business beyond 5 years (see Table 2). P1 mentioned that providing

good quality products is important for sustaining business as the right products help

maintain and attract customers. P1 also noted that business success is the ability to start

of the business with the very best products. P2 shared that making a good quality food

helps strengthen the business reputation, which contributes to business success. P3

mentioned that he is able to sustain business by prioritizing customers’ needs with a good

quality of foods. P3 noted customers continue coming back when they appreciate your

products. P3 also added that providing good quality foods has contributed to his business

success. P2 highlighted that he does not offer coupons to customers but ensure of the

quality of foods, stay local, and develop relationships with customers. Food quality is

consistent with previous literature. Ma, Qu, and Eliwa (2014) found that food quality and

staff service influence the overall customer satisfaction and restaurant image.

Qualified employees. All four of the participants noted that successful restaurant

owners have to work with qualified employees (see Table 2). P2 stated that working with

qualified employees helps restaurant owners to achieve profitable business. Daou et al.

(2013) supported the view that human capital is the heart of sustainable competitive

advantages. P2 shared that he hires employees through personal referrals from current
 76
employees, customers, and friends. P3 stated that it is important to hire the right

employees because qualified employees require less supervision and they accomplish

tasks as needed. P4 noted that he had difficulties for finding qualified employees at the

beginning of business and knew not working with qualified employees was costly for

business. The difficulty for hiring talented and reliable staff is one of the most significant

barriers and challenges to entrepreneurship development (Jafarnejad et al., 2013). P4

asserted that unqualified employees cannot work without assistance and their behaviors

make the business unsuccessful. P4 also noted that he hires experienced employees and

culinary students he had trained himself during their internship. During the member

checking interview, P1 revealed that he is not referred to staffing services to hire

employees; he is successful working only with family members.

Marketing. Three of the four participants mentioned marketing as a useful

strategy for sustaining their businesses beyond 5 years (see Table 2). P1 offers coupons,

gifts cards, and stamp cards as marketing strategies to make customers coming back. P2

provides t-shirts, hats, and other items with his business logos to develop marketing

strategies. These types of advertising help maintain existing customers and gain

additional customers as confirmed by P2. P2 also uses social media web sites, such as

Facebook and Instagram to market his products. Furthermore, P2 shared that Facebook is

a great way for advertising; with $5.00 a day he can get thousands of viewers. P3 noted

that he did advertising before and after being in business for years gained customer trust;

his business continues to grow through a positive word of mouth. The participants’

responses confirmed the findings of Morgan (2012) that successful business owners
 77
implement strategic marketing to build and achieve a sustainable competitive edge and

Hua (2014) that social media enables a diverse of advantages restaurateurs use to achieve

a positive business performance.

Emergent Theme 3: Having Passion

Having passion was the third theme to emerge. All participants discussed their

passion as a strategy to sustain their businesses beyond 5 years. Networking and

innovation were other two strategies participants noted as important for business

sustainability. I discuss the emergent theme having passion and then will follow a

discussion of networking and innovation.

All four of the participants discussed their passion as a strategy to financially

sustain business beyond 5 years (see Table 3). P1 said he did not hesitate to use his 401 k

and family’s savings to start the business. P2 claimed that he enjoyed working for

himself. P4 noted that business owners might not succeed without passion. P4 added

being passionate helps him to develop profitable business. Being passionate increases the

business owners’ emotional attachment to achieve their business goals (Tasnim, Yahya,

& Zainuddin, 2014). P3 stated that he is always optimistic and think about how to

improve his business. P3 and P4 explained that they worked extra hours without getting

paid; they do it because they are passionate about their business success. Through

member checking interview, P1 shared that business owner’s passion is great for business

success but it is important to get involved employees for working towards the same goals.

Small businesses’ passion is transferable to their employees (Turner & Endres, 2017).

Bhuvanaiah and Raya (2014) supported the view that engaged employees feel committed,
 78
empowered, involved, and passionate and demonstrate those feelings in their work

performances.

Table 3

Participants’ Final Advice on Sustainability

Participant responses Number Percentage of total

Networking 3 75%
Innovation 3 75%
Having Passion 4 100%

The existing body of knowledge supports the participants’ responses that business

owners’ passion was an important factor for being successful (Tasnim et al., 2014).

Tasnim et al. (2014) confirmed in their study that the more passionate business owners

are about their businesses, the more sentimental they are for achieving their business

goals. The theme of having passion that contributes to business sustainability is

consistent with the general systems theory of von Bertalanffy’s (1972) that supports all

components of an entity concur to a working system. The personal passion of a business

owner influences the workforce attitude, which contributes to business success.

Furthermore, employees who are not passionate about their work can affect the business

performance.

Networking. Three participants use networking as a strategy to attract customers

to achieve their businesses success beyond 5 years (see Table 3). P1 said he was great

with people of his community and used Facebook website and social events to network

with customers. P2 noted that one of the strategies to sustain business was to stay active

with the community. P2 used the local Chamber of Commerce meeting to build
 79
relationships with suppliers and other business owners. P3 relied on existing customer

relationships to gain additional customers through word of mouth. The persistent

networking is consistent with systems theory and the body of knowledge in that

networking enables different facets of the daily business operations between internal and

external customers and the environment (Turner & Endres, 2017).

Innovation. Three of the four participants recognized the importance of

innovation to operate and achieve successful business beyond 5 years (see Table 3).

Through member checking process P1 noted that he introduces new products sometimes

and runs special advertising. P2 shared bringing new products after ensuring customers

appreciate existing products helps to boost business profit. P4 made changes to the menu

items to attract and retain customers. P4 also used feedback from customers to adjust new

menu items and found this strategy helpful for achieving profitable business. The

participants’ responses align with the existing body of knowledge. Business owners who

combine market innovation and product innovation are able to gain extra options and

chances to grow their businesses (Van Es & Van Du Wal, 2012).

The findings indicated that SME restaurant owners can use three strategies such

as conducting market research, developing great customer service, and having passion to

financially sustain their businesses beyond 5 years. General systems theory was the

conceptual framework of this study. General systems theory helps me identify the

strategies that SME restaurant owners can use to financially sustain business beyond 5

years. The findings showed that a single strategy is not sufficient for SME restaurant

owners to financially achieve business sustainability beyond 5 years, which is consistent

 80
with the general systems theory, because organization consists of numerous

interdependent and interrelated factors working together to ensure organizational goals

(Chatterji & Palio, 2014; Yawson, 2013). The three emergent themes discussed were the

market research, the great customer service, and having passion.

Applications to Professional Practice

The findings of the study apply to SME restaurant owners. The focus of the study

was to explore strategies that SME restaurant owners use to financially sustain their

businesses beyond 5 years. The restaurant industry plays an indispensable role in the U.S.

economy (Herrington & Bosworth, 2016). However, restaurant owners experience

difficulties in sustaining their business (Hua & Lee, 2014). The collected data were from

the participants’ responses and company documents such as profit and loss documents

and cash flow statements that helped identify strategies that SME restaurant owners could

use to sustain businesses beyond 5 years. The study findings showed the emergent themes

market research, great customer service, and having passion as potential strategies for

SME restaurant owners to financially achieve business sustainability beyond 5 years. The

study results are consistent with the existing body of knowledge and the general systems

theory.

The study findings could serve as a guide for struggling business owners to

enhance their business practices and strategies. The findings were relevant to professional

practice because SME restaurant owners could access information regarding how to

sustain their businesses. Current and future SME restaurant owners and entrepreneurs

could refer to the study findings and implement the recommended strategies to achieve
 81
business success. All the participants in this study were successful restaurant owners and

they continue sustaining their businesses by implementing the strategies they revealed.

Implications for Social Change

The implications for social change of the study include the potential for SME

restaurant owners to generate additional job creation and revenues for their communities.

Successful SME restaurant owners and their employees would be susceptible to serve

their communities as they ensure financial security. The findings of the study might

contribute to social change by decreasing the rate of SME restaurant failure and in turn

reduce the number of people living in poverty. Business owners who are able to sustain

their businesses could have a positive effect on the local economic performance, families,

and communities. The findings may contribute to social change if an SME restaurant

owner implements strategies for conducting market research, developing great customer

service, and being passionate about the business to achieve success and remain

sustainable. As a result, successful SME restaurant owners would help address the

unemployment issues by building wealth for themselves, their employees, communities,

and local economy.

Recommendations for Action

The intent of this qualitative multiple case study was to explore the strategies that

SME restaurant owners used to financially sustain business beyond 5 years. Small

business owners represent the force of America’s free enterprise system and provide two

out of every three new jobs and generate more than half of private U.S. GDP (Kim et al.,

2013; Nightingale & Coad, 2014). I identified three recommendations that could help
 82
existing and potential SME restaurant owners in the southern region of the United States

to sustain their businesses beyond 5 years. Current and potential SME restaurant owners

and entrepreneurs should consider (a) market research, (b) great customer service, and (c)

having passion to financially sustain business beyond 5 years.

The first recommendation, current, and future SME restaurant owners and

entrepreneurs should conduct market research to understand the business environment

and trends. Conducting market research will enable business owners or entrepreneurs to

plan strategies to address business challenges and remain sustainable. Participants of this

study recognized the importance of market research for improving business performance.

The second recommendation, SME restaurant owners or entrepreneurs need to develop

great customer service to attract and retain new customers. Great customer service is one

of important factors for business success because gaining additional customers

contributes to the growth of sales and in turn leads to business sustainability. Great

customer service also helps business owners to strengthen the reputation of the business,

which can generate repeat customers. The third recommendation, SME restaurant owners

should be passionate about the business because passionate business owners strive for

success and dedicate enough effort to overcome business challenges. The findings

confirm that the passion of business owners contributes to business success.

Existing and future SME restaurant owners and potential entrepreneurs should

pay attention to the findings of this study to gain information on how to sustain business

beyond 5 years. The Chamber of Commerce and Small Business Administration

representatives of the southern region of the United States should consider the findings of
 83
this study to advise current and future SME owners and entrepreneurs. I intend to

disseminate the results of the study using business journals and scholarly journals. I plan

to present the findings of the study at business trainings, business workshops, and

conferences.

Recommendations for Further Study

I used a qualitative multiple case study method to explore the strategies that SME

restaurant owners used to financially sustain business beyond 5 years. The study included

four participants located in the southern region of the United States. The sample size was

one of the limitations of this study. Future researchers should design their studies with a

larger sample size. The transferability of the research was another limitation. Considering

different geographical locations other than the southern region of the United States might

be necessary to verify whether the findings are replicable in other regions or countries.

Future researchers might consider other research methodologies to clarify whether the

research method influences the sustainability strategies.

My recommendation for further research would be to replicate the current study

with different industries to see if the research outcomes could be the same. I recommend

future researchers to focus on each of the emergent themes of this study to gain additional

insights. As a result, conducting additional study would help future researchers to better

ensure the transferability of the results of this study.

Reflections

I gained a great learning experience during this doctoral research process. The

interview process involved successful SME restaurant owners in the southern region of
 84
the United States, who had sustained their businesses for at least 5 years. Conducting this

study helped me understand the doctoral research process that improved my ability to run

successful SME. I noted the reluctance of participants to take part of the study because

they did not want to disclose their business practices. Participants thought I might be a

potential competitor near their businesses. Some of the participants agreed to participate

when I explained the objective of the research and provided supporting documents

including, informed consent form, letter of introduction, and IRB approval. I also

followed the protocol research checklist (see Appendix E) and did not lead the research

interviews to avoid my influence on participants and minimize the research bias. Making

participants comfortable contributed to the collection of sufficient data to uncover the

findings of this study. I am pleased for conducting this study that will be helpful for my

future professional and academic career. My view on SME restaurants changed after this

study because I learned that SME restaurant owners contribute to the improvement of the

communities and society as a whole.

Summary and Study Conclusions

SME restaurant owners are important for the U.S. economy due to their capability

to generate jobs and revenues in their communities. Some SME owners cannot run a

successful business during their first operation year. The purpose of this qualitative

multiple case study was to explore the strategies that SME restaurant owners used to

financially sustain business beyond 5 years. I used semistructured interview with four

SME restaurant owners to collect primary data. I also shared company document such as

loss and profit statements and cash flow statements to triangulate participants’ responses.
 85
After the data coding and analysis process, three major themes emerged. I tied the

analysis of the emergent themes back to the existing body of knowledge, the literature,

and general systems theory. The results of the study will help struggling SME restaurant

owners and potential entrepreneurs to develop a successful business. The research

findings were clear in suggesting that (a) conducting market research, (b) developing

great customer service, and (c) having passion could be useful for SME restaurant owners

to financially sustain business beyond 5 years.

 86
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Appendix A: Informed Consent Form

Consent Form

You are invited to take part in this research study investigating what strategies small- and

medium-sized enterprise (SME) restaurant owners use to financially sustain business

beyond 5 years in the United States. You can be eligible to participate in this study if you

are restaurant owners within the southern region of the United States. You have to

experience business sustainability for at least 5 years. Eligible participants must be above

the age of 18. This form is a part of a process call “informed consent” to allow you to

understand this study before deciding whether to participate. The researcher conducting

this study is Raimi Gnonlonfoun, who is a doctoral student at Walden University.

Background Information:

The purpose of this study is to explore the experiences of owners of small- and medium-

sized enterprises in the restaurant industry, with a goal to understand the strategies these

owners use to financially achieve business sustainability and provide recommendations to

limit businesses from failing.

Procedures:

If you agree to be in this study, you will be asked to:

• Participate in an individual face-to-face or video Skype interview for 30-45

minutes. The interview will start with demographic information, brief information

about your current role, and questions regarding business sustainability.

• The interview will be audio taped for transcription with your consent. I will also

ask to take notes during the interview.

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• Share company documents with me that will include financial statements, profit

and loss documents.

• Verify your transcribed interview for data accuracy through e-mail.

• Take part in member checking to review my data interpretations and conclusion

through a phone call that may last for 20 minutes.

Here are some sample questions:

What factors have contributed to the growth of your business?

How did you implement your strategies to run a profitable business?

Voluntary Nature of the Study:

Your participation is voluntary. Everyone will have the obligation to respect your

decision of whether or not you decide to participate in this study. No one within your

enterprise or elsewhere will treat you differently if you choose not to participate in this

study. If you decide to join now, you can still change your mind during the study. If you

do not feel comfortable for some questions, you may skip them or withdraw from the

study.

Risks and Benefits of Being in this Study:

Your participation in this study would not pose risk to your safety or wellbeing. You have

the opportunity to voice your view about the strategies of business sustainability or

success. The findings from this study might benefit owners or managers of businesses by

suggesting new business practices to reduce high failure rate of small- and medium-sized

enterprises.

Compensation:
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There will be no direct compensation for participants of this study. You may receive a

copy of the research findings.

Confidentiality:

Any information you provide will be confidential. The researcher will not use any of your

information for personal reasons other than the research objective. In addition, the

researcher will avoid including your name, your organization, or any information that

could identify you in the study reports. All collected data will remain in a fireproof safe

for 5 years and then shredded or destroyed as required Walden University.

Contacts and Questions:

You may ask any question now, or if you have questions later, you may contact the

researcher at 206 229 0935 or by email at raimi.gnonlonfoun@waldenu.edu or

raimign@yahoo.com. If you want to talk privately about your rights as a participant, you

can call Dr. Leilani Endicott. She is the Walden University representative who can

discuss this with you. Her phone number is 612 312 1210 or email address

irb@waldenu.edu. Walden University’s approval number is 03-03-17-0365649 and it

expires on March 2, 2018.

Please keep this consent form for your records.

Statement of Consent:

I have read the above information and I feel I understand the study well enough to make a

decision about my involvement. By replying to this e-mail with the words, I consent, I

understand that I am agreeing to the terms described above.

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Appendix B: Letter of Introduction

Date [ ]

Dear Business Owner,

My name is Raimi Gnonlonfoun, and I am a doctoral student of Walden University. I am

conducting a study on restaurant business in order to complete my degree. I need your

assistance to explore the strategies restaurant owners use to financially achieve business

sustainability. I am requesting an interview. The interview will take about 45 minutes.

With your permission and consent, I will ask you some questions and audio record your

responses. Your personal information and the name of your enterprise will not be

published or shared and will remain confidential. I plan to share the results of this study

with you and other business owners that may be interested.

You may participate in this study if:

You are a restaurant business owner within the southern region of the United

States.

You are above the age of 18.

You have experienced the business sustainability in the past or financially

sustained your business for at least 5 years.

Your participation in this study can make a difference for small-and medium -sized

enterprises in the southern region of the United States.

If you are interested in participating in this study, please contact me by phone at 206 229

0935 or by e-mail at raimi.gnonlonfoun@waldenu.edu or raimign@yahoo.com. I will

also contact you to answer any questions you may have about this study.
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Thank you for your time and consideration.

Sincerely,

Raimi Gnonlonfoun

Walden University Doctoral Candidate

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Appendix C: Interview Questions

1. What strategies have you used to financially achieve business sustainability?

2. What strategies have you found appropriate to sustain your business?

3. How did you implement your strategies to run a profitable business?

4. What factors have contributed to the growth of your business?

5. What barriers did you have during the first years of your business operations?

6. What strategies did you implement to mitigate these barriers?

7. What additional information would like to share on financial strategies for

achieving sustainability?
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Appendix D: Interview Guide and Data Collection

Purposive sample

I – Demographic Information Section:

1. Participant’s name:

2. Participant’s pseudonym:

3. Interview data:

4. Start time: End time:

5. Sex of participant: M ☐ F ☐

6. Participant’s title:

7. Participant’s company:

8. Time with current organization Years: Months:

II – Participant Eligibility Criteria Section:

1. Are you owner of your enterprise? Yes ☐ No ☐

2. Have you experienced business success in the past? Yes ☐ No ☐

3. How long are you operating in business?

III – Interview Questions Section:

1. What strategies have you used to financially achieve business sustainability?

2. What strategies have you found appropriate to sustain your business?

3. How did you implement your strategies to run a profitable business?

4. What factors have contributed to the growth of your business?

5. What barriers did you have during the first years of your business operations?

6. What strategies did you implement to mitigate these barriers to succeed?

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7. What additional information would like to share on financial strategies for

achieving business sustainability?

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Appendix E: Interview Protocol Research Checklist

1. I will introduce myself to the participant and set the stage at a location convenient

of the participant (over a meal or coffee).

2. I will start the interview with the purpose of the study and remember each

participant the research topic.

3. I will notice participants that I care about their time and thank them for accepting

to participate in this study.

4. I will provide the hard copy of the informed consent letter; remind each

participant that the interview will be recorded, and ensure participant about the

confidentiality of the interview.

5. I will turn on the audio recorder; note the data and start time of the interview, and

indicate participant the assigned code representing the participant identity.

6. Each interview will take about 45 minutes to gain responses of predetermined

interview questions and follow-up questions.

7. I will watch for non-verbal cues, paraphrase as needed, and ask follow-up probing

questions to get in-depth information.

8. After reviewing the recorded responses of the interview, I will wrap up the

interview and thank each participant for their time and participation in this study.

9. I will provide explanations regarding member-checking procedure; inform

participant of a possible follow-up member checking interview to ensure the

accuracy of my interpretation of the responses of each interview question.

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10. I will share a succinct synthesis of each individual question after I reach the

conclusion of the study.

11. I will ask probing questions basing on other information that I may have found.

Probing questions and information must be related to ensure the adherence of the

IRB approval.

12. I will walk through each question, read the interpretation, and ask: Did I miss

anything? Or, what would you like to add?